Your FX Dealer will use many tools to enable them to build a comprehensive foreign exchange strategy for your business. These tools can be used independently or in combination.
A spot contract is an agreement to buy or sell currency for immediate delivery (up to five days ahead). If your business needs to make a payment straight away and wants the most competitive exchange rates available, this type of contract should be suitable.
- Agree a rate today
- Receive your currency immediately
- No deposit required to use this contract
- Telegraphic transfer fee of £15 applies on each payment
A forward contract allows you to lock into an exchange rate for delivery up to two years in the future.
Forward contracts are ideal for companies concerned that future rate fluctuations may erode profits, or those that wish to fix a favourable rate for future currency payments.
- Fix an exchange rate to protect against adverse market movements
- Deposit required (dependent on credit ratings)
- Telegraphic transfer fee of £15 applies on each payment
If your business can afford to be flexible about the timing of currency purchases, you can take advantage of our expertise to monitor the markets, set a realistic target rate and buy when that level is achieved. There are two types of market order that can be used independently, or together, to realise a certain rate.
A stop-loss order
A stop-loss order allows a client to set a minimum level at which currencies are bought or sold. Stop-loss orders are suitable for companies wanting to protect their bottom lines whilst allowing for currency markets to move in their favour. A stop-loss order can be raised as the market rises, improving the minimum rate at which you will buy/sell your currency.
- Elect a ‘worst’ case rate
- No deposit required to use this contract
- Dependent on market movements
- Telegraphic transfer fee of £15 applies on each payment
A limit order
A limit order allows a client to set a higher target exchange rate at which, if the rate is reached, their currency will be purchased. A limit order is suitable for businesses with funds to exchange, that are looking to make the most of favourable market movements and can afford to wait until a target rate is achieved.
If your company runs a limit order in parallel with a stop-loss order, the exchange rate at which you trade is guaranteed within a specific range, giving you the advantage of predictability – which should aid your planning processes.
- Set a target exchange rate
- No deposit required to use this contract
- Dependent on market movements
- Telegraphic transfer fee of £15 applies on each payment
A foreign exchange option provides the right – but not the obligation – to enter into a foreign exchange contract at a known exchange rate on a known future date.
Options provide a guaranteed future rate of exchange, but unlike a forward contract, your business is not obliged to deal at that rate. If the market rate is in your favour when an option matures, you can let it lapse and choose to deal in the ‘spot market’ at the more favourable rate.
- Hedge to protect against adverse currency market movements
- No deposit required, payment in the form of a premium
- Flexibility to book a spot contract, if the market moves in your favour
Foreign exchange options can carry a high level of risk to your capital and are not suitable for everyone. You should seek independent advice if necessary.
TTT Moneycorp Limited is authorised and regulated by the Financial Services Authority in the conduct of designated investment business.