FX Specialist 1 study guide
FX Specialist 1 · Work through your exam, one topic at a time.
FX Specialist 1 is an entry-level credential for people who need to demonstrate working competence in foreign exchange: junior dealers and treasury analysts, bank operations and settlement staff, corporate treasurers who manage currency exposure, and compliance or audit professionals who review FX activity. It tests whether you can read a two-way quote, convert between quote conventions, price and value spot and forward deals, explain how swaps and FX derivatives behave, describe hedging choices and their trade-offs, and apply the regulatory and settlement discipline that surrounds every trade. The FX Specialist 1 study guide has 7 sections and about 2,169 words.
01Foreign Exchange Market Fundamentals
The foreign exchange market is a decentralised over-the-counter (OTC) market where participants trade bilaterally or through electronic venues. The exam tests how quotes, participants, sessions and conventions fit together.
316 words, about 2 min02Spot and Forward Transactions
A spot transaction is an agreement to exchange currencies for near-date settlement, normally T+2. A forward outright fixes an exchange rate today for a value date beyond spot, often 1, 3, 6 or 12 months.
331 words, about 2 min03Currency Swaps and FX Derivatives
An FX swap combines a near-date exchange and an opposite far-date exchange. It is used to roll settlement dates or manage short-term funding, not to create a long-term interest rate exposure.
326 words, about 2 min04FX Quotation, Pricing, and Rate Calculations
Quotations can be direct (domestic currency per unit of foreign currency) or indirect (foreign currency per unit of domestic currency). Market convention often uses a fixed base currency, such as EUR/USD, USD/JPY and GBP/USD.
330 words, about 2 min05FX Risk Management and Hedging
The exam tests how firms identify and hedge FX risk. Transaction exposure arises from known future cash flows in foreign currency.
280 words, about 1 min06FX Regulations, Compliance, and Ethics
FX is subject to AML/KYC, sanctions, market-conduct rules and cross-border licensing. The FX Global Code sets voluntary principles for good practice, including execution, transparency and conflict management.
298 words, about 1 min07FX Settlement, Operations, and Documentation
FX settlement moves principal between counterparties. Operations must confirm trade details, agree settlement instructions and ensure both currency legs settle on the correct value date.
288 words, about 1 min