Valuation spot date and overnight

• Reval date: the date the valuation is performed for; not necessarily today.
• Spot date: today (or the reval date) plus the pair's spot days, counting only business days (see FX spot date and settlement).
• Valuation spot date (also adjusted or normalised spot date): a spot date normalised across multiple pairs to the same number of spot days, used when valuing settled cash across currencies with different spot conventions.
• Overnight: a rate quoted from today to the next business day. Trading desks prefer overnight rates for intraday positions; Finance prefers spot rates for official end-of-day valuation.

For currencies with a T+2 spot lag, there is a two-day region before spot: today → tomorrow (O/N) and tomorrow → spot (T/N). For currencies with a T+1 spot lag (e.g. USD/CAD, USD/TRY) this region collapses to a single day, since there is no separate tomorrow-to-spot leg to price. This is why the outright formulas below take a different shape for T+1 vs. T+2 currencies: a T+1 currency only ever needs to strip out one leg (O/N) to move from spot back to today, while a T+2 currency needs to strip out both legs (T/N, then O/N).

For a currency with T+1 settlement (e.g. USD):

\[\text{Outright today} = \text{Spot} - \text{O/N points} \times \text{pip factor}\]

For a currency pair with T+2 settlement (most pairs):

\[\text{Outright today} = \text{Spot} - \text{T/N points} \times \text{pip factor} - \text{O/N points} \times \text{pip factor}\] \[\text{Outright tomorrow} = \text{Spot} - \text{T/N points} \times \text{pip factor}\]

These formulas tie the short end of the forward curve to spot and are the basis for theta calculations on settled cash positions; the pip factor is covered in Pip, tick size, and pip factor. The T/N point used here is a date-window input to this formula only — for Tom/Next's own dual role as both a settlement convention and a funding mechanism, see Tom/Next.