What is a spot to forward swap?

A spot to FORWARD SWAP IN WHICH THE PURCHASE OR SALE OF a SPOT EXCHANGE IS accompanied BY THE SALE or purchase OF the same forward exchange.

It’s the most common form of swap.

There are two types of spot-to-forward swap transactions depending on the participants. One type is pure swap transactions, which involve only two parties, that is, all between a bank and another bank or corporate customer.

The other is a decentralized swap, which involves three participants, in which the bank trades with one party at the spot and another party at the forward.

In any case, banks are still in effect trading both spot and forward, which is characteristic of a swap.

The point of such trades is to avoid risk and profit from the changes.