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Home > Forward Contracts - Read Watch Listen - World First

How do Forward Contracts Work?

Forward contracts enable you to fix an exchange rate in advance of actually needing to make an overseas payment.
The advantages:

For example it allows you to know and fix the sterling cost of a property purchase (private client) or shipment of overseas goods (corporate client) up to 1 year in advance of the payment date.

It also protects you against adverse currency fluctuations.

Case Study

Mr. Jones agreed to buy a house in June that cost €350,000 with payment due on the 5th August. Between the 24th June and the 5th August 2005, the sterling to euro exchange rate moved from 1.5114 down to 1.4345.

GPB EUR Exchange Rate

When Mr Jones agreed to buy the property, the cost using the exchange rate in June was: £231,573. If Mr Jones had waited until August and used the exchange rate then, the cost would have risen to: £243,987, an increase of over: £12,414.

In fact, Mr Jones, entered into a "Forward Contract" with World First, which enabled him to fix the exchange for his August transaction in June.

	Euros	Pounds
Cost of Property (June exchange rate)	€350,000	£231,573
Cost of Property (August exchange rate)	€350,000	£243,987
Cost of Property (August rate "forward contract" fixed in June)	€350,000	£232,600

With the forward contracts we offer, you can have peace of mind knowing that irrespective of exchange rate movements, you will always have a fixed sterling cost.

Please contact our:
Private client desk on 020 7801 9080
Corporate client desk on 020 7801 9050

You will be assigned a friendly and professional consultant to discuss your requirements. They will work with you on every step of the transaction.

We look forward to hearing from you.

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