Some companies choose to have all of their funds swept into a sweep account if they believe that the increased earnings will more than offset the fees they would have been rebated, should they have left the funds in the account. Other companies calculate the approximate amount needed to rebate the fees and then only sweep funds in excess of that amount.
Companies pay extra for more complex investment strategies, and for more detailed communication from their bank. For example, knowing when the checks they issue will probably clear, enables them to more precisely determine how much to invest and for how long. This service is known as controlled disbursement.
Retrieved from "http://en.wikipedia.org/wiki/Sweep_account"
Sunday, May 9, 2010
Mechanics
In banking, sweep accounts are primarily used as a legal workaround to the prohibition on paying interest on business checking accounts. In this system, the funds are described as being "swept overnight" into an investment vehicle of some kind. The choices for sweep investments are often the following: money funds, and what are known as "Eurodollar Sweeps" or "Repo Sweeps".
Eurodollar sweeps are legally transfers of funds to the bank's offshore entities, although essentially they are just an accounting technique to allow the banks to have full lending of the funds without the reserve requirements normally required and without having to pay for FDIC insurance (as the sweep is uninsured). Essentially, the funds are just unsecured obligations of the bank, and therefore are paid the highest interest rate offered by the bank to overnight deposit borrowings.
"Repo Sweeps" ("repo" meaning "repurchase agreement") are for companies that are concerned about the safety of the bank (usually by mandate of the companies/institutions charter and not due to the opinions of the employees or financial staff). In this arrangement, the swept funds on deposit with the bank are secured by some of the bond holdings of the bank. If the bank were to fail, the depositor would just be given the bond holdings and then could sell the bonds to get their money back (unless something happens to the bond prices in the interim).
Larger corporate bank accounts are charged numerous fees for each of the services the bank offers (such as a charge per every check deposited), however the bank rebates these fees based on the companies account balances in a process known as account analysis.
Eurodollar sweeps are legally transfers of funds to the bank's offshore entities, although essentially they are just an accounting technique to allow the banks to have full lending of the funds without the reserve requirements normally required and without having to pay for FDIC insurance (as the sweep is uninsured). Essentially, the funds are just unsecured obligations of the bank, and therefore are paid the highest interest rate offered by the bank to overnight deposit borrowings.
"Repo Sweeps" ("repo" meaning "repurchase agreement") are for companies that are concerned about the safety of the bank (usually by mandate of the companies/institutions charter and not due to the opinions of the employees or financial staff). In this arrangement, the swept funds on deposit with the bank are secured by some of the bond holdings of the bank. If the bank were to fail, the depositor would just be given the bond holdings and then could sell the bonds to get their money back (unless something happens to the bond prices in the interim).
Larger corporate bank accounts are charged numerous fees for each of the services the bank offers (such as a charge per every check deposited), however the bank rebates these fees based on the companies account balances in a process known as account analysis.
Sweep account
A sweep account is a combination of two or more accounts at a bank or financial institution. It is useful in managing a steady cash flow between a cash account used to make scheduled payments, and an investment account where the cash is able to accrue a higher return.
Many banks and financial institutions offer a sweep account service for personal customers and small business owners. It has also become part of the arsenal of services offered by credit card companies.
Many banks and financial institutions offer a sweep account service for personal customers and small business owners. It has also become part of the arsenal of services offered by credit card companies.
Common money market instruments
Certificate of deposit - Time deposits, commonly offered to consumers by banks, thrift institutions, and credit unions.
Repurchase agreements - Short-term loans—normally for less than two weeks and frequently for one day—arranged by selling securities to an investor with an agreement to repurchase them at a fixed price on a fixed date.
Commercial paper - Unsecured promissory notes with a fixed maturity of one to 270 days; usually sold at a discount from face value.
Eurodollar deposit - Deposits made in U.S. dollars at a bank or bank branch located outside the United States.
Federal agency short-term securities - (in the U.S.). Short-term securities issued by government sponsored enterprises such as the Farm Credit System, the Federal Home Loan Banks and the Federal National Mortgage Association.
Federal funds - (in the U.S.). Interest-bearing deposits held by banks and other depository institutions at the Federal Reserve; these are immediately available funds that institutions borrow or lend, usually on an overnight basis. They are lent for the federal funds rate.
Municipal notes - (in the U.S.). Short-term notes issued by municipalities in anticipation of tax receipts or other revenues.
Treasury bills - Short-term debt obligations of a national government that are issued to mature in three to twelve months. For the U.S., see Treasury bills.
Money funds - Pooled short maturity, high quality investments which buy money market securities on behalf of retail or institutional investors.
Foreign Exchange Swaps - Exchanging a set of currencies in spot date and the reversal of the exchange of currencies at a predetermined time in the future.
Short-lived mortgage-backed and asset-backed securities
Repurchase agreements - Short-term loans—normally for less than two weeks and frequently for one day—arranged by selling securities to an investor with an agreement to repurchase them at a fixed price on a fixed date.
Commercial paper - Unsecured promissory notes with a fixed maturity of one to 270 days; usually sold at a discount from face value.
Eurodollar deposit - Deposits made in U.S. dollars at a bank or bank branch located outside the United States.
Federal agency short-term securities - (in the U.S.). Short-term securities issued by government sponsored enterprises such as the Farm Credit System, the Federal Home Loan Banks and the Federal National Mortgage Association.
Federal funds - (in the U.S.). Interest-bearing deposits held by banks and other depository institutions at the Federal Reserve; these are immediately available funds that institutions borrow or lend, usually on an overnight basis. They are lent for the federal funds rate.
Municipal notes - (in the U.S.). Short-term notes issued by municipalities in anticipation of tax receipts or other revenues.
Treasury bills - Short-term debt obligations of a national government that are issued to mature in three to twelve months. For the U.S., see Treasury bills.
Money funds - Pooled short maturity, high quality investments which buy money market securities on behalf of retail or institutional investors.
Foreign Exchange Swaps - Exchanging a set of currencies in spot date and the reversal of the exchange of currencies at a predetermined time in the future.
Short-lived mortgage-backed and asset-backed securities
Money market
The money market is a component of the financial markets for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames. Trading in the money markets involves Treasury bills, commercial paper, bankers' acceptances, certificates of deposit, federal funds, and short-lived mortgage-backed and asset-backed securities.[1] It provides liquidity funding for the global financial system
Saturday, April 10, 2010
Novice Forex Ordres
Les ordres permettent d'effectuer des transactions. Ils permettent aux traders de prendre de nouvelles positions sur le marché ou de stopper des positions qui sont déjà sur le marché.
Ces ordres peuvent donc être associés à des positions ouvertes, mais pas nécessairement.
Les ordres peuvent donc permettre de fixer le bénéfice ou la perte que le trader souhaite associér à ses positions.
Ces ordres peuvent donc être associés à des positions ouvertes, mais pas nécessairement.
Les ordres peuvent donc permettre de fixer le bénéfice ou la perte que le trader souhaite associér à ses positions.
Novice Forex
Le Forex est un marché interbancaire. Il n'a donc pas de place définie comme les bourses (bourse de Paris, de New York.). Le forex est un flux continu d'échanges entre les banques du monde entier. Ces échanges de données permettent de faire fluctuer les devises de tous les pays.
Les brokers sur le Forex reçoivent le flux d'une banque et permettent grâce à leur plateforme de trading aux investisseurs privés d'accéder au marché des changes.
Les market makers reçoivent le flux de plusieurs banques et créent eux-mêmes leur propre flux afin de permettre aux investisseurs de spéculer sur le marché des changes. Ces investisseurs spéculent sur le forex via 2 analyses principales : l'analyse fondamentale et l'analyse graphique.
Les devises fluctuent 24h/24 et 7 jours sur 7 (La plupart des brokers et market makers ne permettent pas de trader le week-end car la volatilité sur le marché des changes est très faible). La variation la plus faible sur une parité est de 1 pip.
On appelle le taux de change le prix d'échange entre 2 monnaies. Pour le taux de change Eur/usd, si le cours est de 1.2850, alors si vous changez 1 euro en dollars, vous aurez en échange 1.2850 dollars.
Les brokers sur le Forex reçoivent le flux d'une banque et permettent grâce à leur plateforme de trading aux investisseurs privés d'accéder au marché des changes.
Les market makers reçoivent le flux de plusieurs banques et créent eux-mêmes leur propre flux afin de permettre aux investisseurs de spéculer sur le marché des changes. Ces investisseurs spéculent sur le forex via 2 analyses principales : l'analyse fondamentale et l'analyse graphique.
Les devises fluctuent 24h/24 et 7 jours sur 7 (La plupart des brokers et market makers ne permettent pas de trader le week-end car la volatilité sur le marché des changes est très faible). La variation la plus faible sur une parité est de 1 pip.
On appelle le taux de change le prix d'échange entre 2 monnaies. Pour le taux de change Eur/usd, si le cours est de 1.2850, alors si vous changez 1 euro en dollars, vous aurez en échange 1.2850 dollars.
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