Free · Foreign exchange
FX Forward Premium or Discount — 360-Day Basis
Compare consistently quoted spot and forward exchange rates and annualize the relative gap using a 360-day convention.
- Formula & worked example
- Private in your browser
- No signup
Calculator inputs
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How to use this calculator
- Enter the known values in the units shown. Results update as you type.
- Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
- Use the worked example to check the method. Reset restores the starting fields.
Use the result with context
Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.
Formula and method
A spot quote of 1.20 and forward quote of 1.212 give a 1% forward premium. Over a 90-day contract, the simple annualized premium is 4% on a 360-day basis.
Forward premium = (forward − spot) ÷ spot; simple annualized premium = premium × 360 ÷ contract days
Worked example
Enter these known values and leave the other values blank.
- Spot quote — quote currency per base currency
- 1.2
- Forward quote — same quotation direction
- 1.212
- Contract duration in days
- 90 days
- Relative forward premium / discount
- 1 %
- Simple annualized premium — 360-day basis
- 4 %
Assumptions and limitations
- Spot and forward rates must be positive and use the same base currency, quote currency and quotation direction.
- Contract duration is positive and measured in days. Annualization is simple and uses 360 days, not compounding or a 365-day convention.
- This tool compares entered quotes. It does not calculate a market forward quote from interest rates or predict the future spot rate.
- Reversing both currency quotes changes the percentage gap nonlinearly; it is not simply a sign change. Spreads, fees and execution costs are excluded.
Common questions
Does a 4% annualized premium predict a 4% exchange-rate move?
No. It rescales the entered forward-versus-spot gap using the chosen 360-day convention.
Can I enter the currency pair in either direction?
Yes, provided both quotes use the same direction. Reciprocal quotes produce a different percentage, not merely the negative of the original.
References
The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.