Forward Contract
A forward contract is a transaction that allows you to book an exchange rate for delivery of up to 1 year in advance. This allows you to remove any future risk from currency fluctuations. Also known as hedging this is a brilliant way of managing your foreign exchange exposure.
A forward contract is ideal for personal clients wishing to fix the cost of buying an overseas property or financial obligation. It is also ideal for a business looking to capitalise on the prevailing exchange rate against future obligation and for protecting a business' profit margins.
Forward contracts require a deposit of 10% deducted from the sum payable on the maturity date. The (margin) deposit is required to protect against defaults on forward contracts. Please note you can move the maturity date of your contract before or after this date by contacting your broker. There may be additional costs for doing this.
Spot Contract
A spot contract is a transaction with an agreement to buy or sell currency for two working days ahead. Payment of funds and settlement is then made on the second working day. This type of transaction is the most popular as it serves the requirements for delivery of currency within a short time period but it also allows enough time for you to send funds. Please ask your broker if you need any additional days to make payment at the time of booking your trade.
Stop Loss Order
A stop loss placed in the market will enable you to buy or sell a currency set at a lower level than the prevailing rate. This protects you on the downside against negative movements and limits your loss in a falling market. The exchange rate is not 10% guaranteed at the required rate as there is a risk in any fast moving market that the order is executed (filled) on less advantageous terms. You can also place a time order or let it run GTC (good-till-cancelled). This type of order runs in the market 24 hours a day 7 days a week.
Limit Order
A limit order placed in the market will enable you to buy or sell a currency when the market reaches a required level, higher than the prevailing exchange rate. On your instruction we will monitor the market and confirm if the rate is achieved (filled) at the required level / target rate. You can also place a time order or let it run GTC (good-till-cancelled). This type of order runs in the market 24 hours a day 7 days a week.
Currency UP Alert
A currency UP Alert allows you to request notification by phone or email if a currency you wish to buy or sell reaches a more advantageous rate in the market, higher than the prevailing exchange rate. This type of order works during normal office and does not require any commitment. For example if GBP/EUR was trading at 1.16, you can place an up alert at 1.17
Currency DOWN Alert
A currency DOWN Alert allows you to request notification by phone or email if a currency you wish to buy or sell reaches a lower rate in the market, lower than the prevailing exchange rate. This type of order works during normal office and does not require any commitment . For example if GBP/EUR was trading at 1.16, you can place an DOWN Alert at 1.15
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