Tomorrow Next - Tom Next

AAA

DEFINITION of 'Tomorrow Next - Tom Next'

In currency transactions, the purchase and sale of a currency made to avoid taking actual delivery of the currency. The current position is closed out at the daily close rate and re-entered at the new opening rate the next trading day. Also referred to as "tomorrow next procedure".

INVESTOPEDIA EXPLAINS 'Tomorrow Next - Tom Next'

In most currency trades, delivery is two days after the transaction date. Tomorrow-next trades arise because most currency traders are speculators and have no intention of taking delivery of the currency. If a trader buys and closes out his or her currency position the same business day, there isn't a problem with delivery. But traders who wish to hold their position over the current business day and have no intention of accepting delivery of the currency would use tomorrow-next procedures: the position is closed out that business day at a closing rate, and then the position is re-established the following day. This allows the trader to hold the position for that day without worrying about delivery.

RELATED TERMS
  1. Currency

    A generally accepted form of money, including coins and paper ...
  2. Settlement Date

    1. The date by which an executed security trade must be settled. ...
  3. Delivery Date

    1. The final date by which the underlying commodity for a futures ...
  4. Delivery

    The action by which an underlying commodity, security, cash value, ...
  5. Forex - FX

    The market in which currencies are traded. The forex market is ...
  6. Forex Spread Betting

    A category of spread betting that involves taking a bet on the ...
Related Articles
  1. Forex Education

    The Fundamentals Of Forex Fundamentals

    Charting is not the only way to analyze the foreign-exchange market. Learn how to apply fundamental analysis to the economic indicators.
  2. Options & Futures

    A Primer On The Forex Market

    Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers.
  3. Forex Education

    Forex: Wading Into The Currency Market

    We go over the ground rules and available resources needed for this undertaking.
  4. Options & Futures

    Getting Started In Forex

    Before entering this market, you should define what you need from your broker and from your strategy.
  5. Forex

    What does rollover mean in the context of the forex market?

    In the forex (FX) market, rollover is the process of extending the settlement date of an open position. In most currency trades, a trader is required to take delivery of the currency two days ...
  6. Forex Education

    What's the difference between bid-ask spread and bid-ask bounce?

    Understand the difference between the bid-ask spread that determines the buy or sell price for a stock and a bid-ask bounce, a situational price volatility.
  7. Forex Strategies

    How do I create a Forex Range-Bound trading strategy?

    Discover how to create a range-bound trading strategy with forex currency pairs, and learn which kinds of pairs are most conducive to ranges.
  8. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  9. Forex Education

    Are Downside Tusuki Gap patterns important when trading forex pairs?

    Find out why forex traders use candlestick charting for currency pairs, and learn how the Downside Tasuki Gap pattern can be spotted for short-term gains.
  10. Forex Strategies

    What are common strategies traders implement when identifying a Bearish Engulfing Pattern?

    Learn how to spot a bearish engulfing pattern, and learn some of the trading strategies you can implement to take advantage of bear momentum.

You May Also Like

Hot Definitions
  1. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  2. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  3. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  4. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  5. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  6. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
Trading Center