Tomorrow Next, Tom Next

The term ‘tomorrow next’ or ‘tom-next’ is a currency trading strategy. In the Forex market, an investor needs to take the delivery of the currency that he or she has brought two days after the trade is closed, but in that two day window they can execute a new trade and nullify the old one, meaning that they can continue to earn returns without taking delivery of the currency traded. This means that traders need not accept the actual delivery of a currency. They can carry forward their positions in the currency to the next day. This strategy helps speculators who aim to earn profits based on these variations in currency exchange rates.

Explaining Tomorrow Next Trade

The tomorrow next strategy enables traders to rollover their open trading positions to the next few days. The key to the tom-next trade is the time gap of two days between the closing of a position and taking of the delivery of the currency. This time gap is used by investors to realize attractive daily returns on the amount that gets invested in the Forex market.

Here are the steps involved in the tom-next:

An investor buys a currency and sets up the tom-next trade for the next day. By the end of the trading day, the value of currency moves favorably. This is the rate at which the investor closes the position at the end of the day but it does not apply for the next day.

After closing the position, the investor arranges to re-enter the market with the same currency on the very next trading day.

The new position is made at a new exchange rate. The time gap between the closure and the re-opening of the trade offers the investor an opportunity to speculate on the global performance of the currency.

The moment a tom-next trade is executed, the previous delivery date is nullified and a new date is set. The investor can hold on to the currency and earn substantial profits if the currency speculations prove to be correct.

The best part about tomorrow-next trade is that an investor can hold a valuable asset for an extended period without accepting delivery of the currency. An investor can simply close out on the current position by the end of the trading day and establish a new position for the next trading day.