A next-tomorrow trade is a forex strategy where an investor can make a return without taking delivery of the currency. By closing the current position at the end of the trading day and re-establishing a new position on the following trading day, the need for delivery becomes moot. This allows for speculation based on calculated projections of currency performance. Market speculators often use this strategy to quickly turn investments into the Forex market.
A next-tomorrow trade is a foreign currency trading strategy designed to make the actual delivery of a currency unnecessary. This is achieved by a careful arrangement of the closing and opening positions associated with the investment. Thus, the investor has the potential to make an attractive return on investment without ever receiving the correct currency.
The key to an effective tomorrow’s trade is to ensure that the current position is closed at the applicable daily closing rate for the current trading day. At the same time, the investor arranges for the currency to re-enter at a new opening rate at the start of the next trading day. This allows for the ability to engage in speculation based on calculated projections of currency performance. If the approach works to the investor’s advantage, the end result is a sizable return on investment without ever having to take delivery on the currency in question.
The reason why a tomorrow trade is possible has to do with the usual delivery date on the acquisition currency. In most currency markets, the process takes two trading days. This means that if the investor can acquire the currency today and set up a trade tomorrow to take advantage of an increase in value on the next trading day, the need for delivery becomes moot.
Market speculators often make use of a near-tomorrow trade as a way to quickly turn investments into a Forex market. At the same time, using a next-tomorrow trade is a great way to hold onto a valuable asset for an extended period of time without taking delivery. All that is required is to close the current position at the end of the trading day and re-establish a new position on the following trading day. The action effectively cancels the previous delivery date and sets a new one. An investor using this strategy can therefore hold the currency as long as he wishes to make a reasonable return, then simply sell off the investment.
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