Trying to understand what being in a short position of a currency forward means.

For example, given a 60-day currency forward at 0.92154 pounds/euro where euro is the base currency, does the short position of this contract mean I will be selling pounds for euros? And the long position is I will be buying 0.92154 pounds given one euro.

  • $\begingroup$ If the base is EUR, then a short position means you have agreed to sell EUR and receive GBP in 60 days. The base currency is the currency to which the verb (buy, sell, go long, go short) is applied. In quoting EUR and GBP, EUR is indeed the default base currency. $\endgroup$
    – noob2
    Apr 25 '20 at 21:01
  • $\begingroup$ Suppose you go to a farmer's market and you see on a slate: 0.92154 pounds per chicken delivery in 60 days. Then if you say "I sell 5" you have agreed to sell 5 chickens (the base) and in 60 days when you deliver you will receive 5*0.92154 British pounds (the quotation currency). You are now short chickens and you will be happy if the price of chickens drops below 0.92154, unhappy if it goes above. $\endgroup$
    – noob2
    Apr 27 '20 at 0:22

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