Quanto

This Issue in United States

Quanto

Concept of Quanto in the context of derivatives contract, by the International Swaps and Derivatives Association (ISDA): A product where the underlying is denominated in one foreign currency but settled at a fixed rate in another currency. It uses a floating rate of a foreign interest rate but applies this to a notional amount in a domestic currency. Such are common amongst speculators looking to gain exposure to foreign assets yet still shielding themselves from exchange rate fluctuations.

Resources

See Also

• Derivatives Contract