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Foreign exchange solutions for your business

No matter what your business does, if you need to make just one payment, set up payments to lots of people, protect a favourable rate for the future or want to do more to protect your business from currency fluctuations then look no further - we'll find the right product to suit you and your business' needs and appetite for risk.

Spot contracts

If you need to make an international payment straight away (or with very little notice) then a spot contract could be the one for you.  We would offer you a rate based on the live exchange rate on the day and you can make a payment there and then. They're great if you just need to get it done.

Forward contracts

If you want to lock in a rate but aren’t ready to make a transfer - fix it up to 3 years in advance. The great thing about this is that you'll know exactly how much you'll get when you're ready to transfer.

You might need to pay an initial deposit, then the balance will be due at the end of the contract. If the rates move against you, you may need to top up the deposit. Your dealer will explain and discuss this with you before you book your forward.

Currency options - risk management

Hedging with currency options allows you to protect your bottom line against fluctuations in exchange rates. Even better, you can also benefit if rates start to move in your favour.

There are two basic kinds – one where you pay a premium, or fee and one where you don't.

Pay a premium up front and you can fix an exchange rate for a point in the future. You'll benefit up to 100% if the rates move in your favour. The higher the premium, the more flexibility and freedom you'll have.

If you choose not to pay a premium, the cost will be built into your exchange rate. The rate would then be lower than if you'd have paid a premium. Still, you'll be able to benefit 100% if the rates move in your favour.

Protection option

A protection option is another form of foreign exchange hedging. Like a forward contract, it lets you set a worst case rate. But unlike a forward contract you'll pay a premium up front. This premium gives you the right rather than the obligation to buy at this worst case rate.

If the rate moves against you, you just use your worst case rate. However, if exchange rates move in your favour, you can use the improved spot rate.

Advantages

  • You get all the benefits of a forward contract
  • Guaranteed worst case rate
  • You benefit 100% if the rate moves in your favour

Disadvantages

  • Upfront premium (cost)

Risk reversal

A risk reversal is another form of currency hedging. Like a protection option, a risk reversal allows you to set a worst case rate for a fee paid up front (a premium). In addition, it lets you set a best case rate. Because you have this, the premium is less.

If the rate moves against you, you use your worst case rate. If it moves in your favour, you can take advantage of the spot rate. If the spot rate is better than your best case rate, you simply get your best case rate.

Advantages

  • Guaranteed worst case rate
  • You benefit up to the best case rate if the rate moves in your favour
  • Your premium is reduced

Disadvantages

  • You cannot benefit beyond your best case rate
  • Upfront premium (cost)

50% participating forward

With this way of hedging currency risk, you don't pay a premium, but the worst case rate you agree to will be slightly worse than a forward contract rate.

However, if the exchange rate moves in your favour, you’ll be able to benefit from 50% of any upside. The reason you don’t get 100% of the upside is that you don’t pay a premium. But you still have 100% protection if rates move against you.

Advantages

  • Guaranteed worst case rate
  • You benefit 50% when the exchange rate moves in your favour
  • No premium to pay

Disadvantages

  • Your worst case rate is worse than a forward contract

Convertible forward

There's no premium with this currency hedging option. With a convertible forward, your worst case rate is slightly worse than the forward contract rate, but you can benefit 100% if the exchange rate moves in your favour. You also have 100% protection if rates move against you.

But your agreed "best case rate" is a ceiling. If the spot rate goes through this ceiling, you revert to a forward contract at your worst case rate.

Advantages

  • Guaranteed worst case rate
  • You benefit 100% in any favourable moves up to your best case rate
  • Zero premium to pay

Disadvantages

  • Your worst case rate is worse than a forward contract
  • If the spot rate goes through your ceiling, you revert to your worst case rate

Firm orders

If you know the rate you want or know the rate you definitely don't want but don't have time to keep tabs on what's going on, just tell us.  If the rate gets to where you want it - we'll take action and book it for you.  And if it gets to where you don't want it - we'll do the same again. We'll strike while the iron's hot to make sure that you get the best deal possible or protect yourself if the markets move against you.

That way you can sleep easy. So whether it's all going up, down, left or right we'll have you covered.

Easy bulk payments

Sounds like an oxymoron, right? But if you have loads of international payments to make, we can help. There are 3 options. The first is that you can keep making them manually. Or you can choose to bulk upload the details to our online platform and make the payments. Easy. Or we can work with you to come up with a fully automated solution so everything happens all in one place. Even better.