left hand side

Foreign exchange(forex) traders simultaneously exchange, buy or sell currency for speculation. The trade is similar to the stock exchange, and it often uses the term left-hand side(LHS) or right-hand side(RHS) to explain the exchange rates in terms of base. For example, GBPUSD – if it is equal to 1.65 –shows the rate of one unit.

The first three letters are the base, and the next three refer to the currency one buys or sells for 1 unit of the base. In such a trade, the investor expects the currency rate to rise like a stock and will buy more currency pair if they expect the rates to increase and sell if they expect the price to drop in future.

If a client wants to buy GBP and sell USD, then the Forex calculator takes the price on the right-hand side \but if you are selling the base, you are on the left-hand side.

This is also used in forward exchange rates GBP EUR, where the investor expects to hedge against risks. The investor contracts to exchange the USD proceeds for EUR in the future at a specific rate, expecting to gain from appreciation in EUR.