Forward contracts for business
Hedging currency risk with forward contracts can be a proactive solution to protect your business against market volatility. With FX forward contracts, businesses dealing with international transfers can lock in exchange rates, reducing uncertainty and maximizing financial performance.
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What is an FX forward contract?
Forward FX contracts offer a strategic solution to manage currency risk. By locking in a predetermined exchange rate for future currency transactions, businesses can mitigate the impact of market volatility and currency fluctuations. This powerful tool enables you to stabilize cash flows and enhance overall financial planning. Currency forward contracts are just one of the many simple yet powerful foreign exchange solutions we have on offer at Moneycorp.
Forward contracts involve three main components:
- Spot rate: The current market rate for immediate transactions.
- Forward rate: The predetermined rate that will be applied, typically matching the current spot rate.
- Settlement date: The future date when the transaction will take place.
Forward contracts offer a unique advantage over other currency risk-management tools. Unlike options, which may incur additional costs and uncertainties, or spot contracts, which only provide immediate exchange rates, forward contracts provide certainty. By locking in a predetermined exchange rate, businesses can confidently plan their financial strategies, mitigating the impact of fluctuating currency markets.
How to buy forward currency contracts with Moneycorp
Buying a forward currency contract with Moneycorp is a quick and straightforward process, enabling you to hedge against adverse currency fluctuations by locking in an exchange rate for future transactions.
- Initial consultation: A dedicated Relationship Manager at Moneycorp will assess your business's requirements and talk you through the available options. We'll help you establish the best timeframes and currencies for your FX forward contract.
- Open a Moneycorp account: You'll be required to provide some basic documentation such as proof of identity and business registration details to open an account. Our team is available to guide you through the process to ensure your account is set up efficiently.
- Provide the required documentation: To set up your forward contract, you'll need to provide the following:
- The amount of currency you wish to buy or sell
- The currency pair involved (e.g. USD to GBP)
- The date you would like the contract to settle (i.e. the date the funds will be transferred)
- Agree on the forward rate: Once your account is open, your dedicated account manager will secure a forward rate based on your business's needs. This predetermined rate will be locked in at that price, regardless of exchange rates that may fluctuate before your settlement date.
- Monitor your contract: Our online platform gives you 24/7 access to track your currency forward contracts. You can also view your account details and keep on top of market movements with ease.
Why partner with Moneycorp for your forward FX contracts?
Forward currency contracts provide the advantage of locking in a specific exchange rate for future international business payments. This certainty allows businesses to accurately budget and forecast their financial performance, eliminating the uncertainty associated with fluctuating currency markets.
By locking in an exchange rate with a forward FX contract, businesses can hedge against unfavorable shifts in the exchange rate. This strategic approach ensures financial stability, even in volatile foreign exchange market conditions.
At Moneycorp, we're proud to be a trusted provider in the foreign exchange market, helping businesses mitigate risks and maximize trading opportunities.
If you enter a buy or sell forward currency contract with Moneycorp, you'll have access to more than 130 currencies at fixed, highly competitive rates from a pool of 16 liquidity providers.
Here are just some of the reasons why you should consider partnering with Moneycorp for specialized FX forward contracts:
- Over 45 years of experience helping businesses across a range of sectors
- Dedicated customer service to help you identify robust solutions for your business
- Market insights from financial experts in our global offices
- Live tracking of exchange rates to keep you ahead of the market
We are also fully licensed and regulated by the Securities and Exchange Commission (SEC) and hold a money transmitter license in all 50 US states.
Get in touch today for more on FX forward contracts
Managing currency risk can be challenging for businesses operating globally. Moneycorp's specialized foreign currency forward contracts offer a reliable solution to protect your business from market volatility and ensure financial stability.
Forward contracts FAQs
How can I sign up for forward FX contracts?
Ready to get started? Get in touch with our team and we'll help you find the right FX solutions to reach your financial goals.
Simply fill out our online contact form or give us a call at 800 239 2389 in the USA or 888 822 8131 in Canada. You can also reach us via email.
Discover our other business solutions
*Forward Contracts may or may not require a deposit dependent upon your facility agreement.
**Our team of experienced currency risk management specialists are approved by the FCA for investment business. Following an initial assessment of your risk-appetite and investment objectives they can formulate and illustrate a bespoke solution for you to consider. Please note that Option related products are regulated investment products which can carry a higher level of risk than Forward Contracts.
