Can i use leverage in forex swaps and especially in forward swaps?
Almost surely you can’t enter into a forex swap. Forex swaps are done with AA credits which means they are only really done by institutions.
Anyway, the structure of Forex swaps pretty much means that there is infinite leverage. There are a bunch of different structures but usually A hands B a pile of Currency 1, B hands A an equivalent pile of currency 2 and they agree on an amount to trade back again at some later time point. Neither has invested any money (since they invest the same amount in one currency as they get back in the other).
By a forward swap, do you mean a forward contract or a forward starting swap? In either case, you get infinite leverage by the same kind of mechanism.
There are tons of “investments” that require no intial outlay of capital for institutions with lots of capital. In the extreme case, like super senior tranches of CDO’s the investment is “unfunded” which means no capital is required upfront, and you just sign up to get paid income every month. If the tranche gets hit, you owe money but if it doesn’t you don’t have to invest any capital at all and you just collect your checks.
Forex: SPOT vs SWAP markets
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