Short-dated transactions have a maturity or a delivery day prior to the spot date. The vast majority of such trades are in the foreign exchange swap market where long and short positions in different currencies are efficiently covered for short periods.
Global time zones have an impact on the ability of traders to conduct short-dated transactions. The further east a market participant is located, the easier it is to book a same day or tom/next value trade. The further west a market participant is located, the more difficult it would be to conduct short-dated transactions.
There are a number of short-dated FX transactions:
Value today
Value tom/next
Value spot/next
The short-dated outright price is derived as follows:
Decide on the spot rate required
Reverse both the side of market and the plus or minus sign on the swap points
Turnover in short-dated outrights is minimal compared to turnover in the FX swap market. Outright transactions are only used to cover last minute exposures.