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Forward Contract

Forward Contract

Fixing a rate for delivery in the future.

A forward contract allows you to buy or sell a set amount of currency, based on the live market rate at that time, for a particular date in the future. In short, you can secure a rate today in readiness for a transfer in the future.

Your forward contract rate can be secured for up to two years in the future.

Types of contract

• Fixed forward – This type of forward contract allows you to benefit from a better exchange rate if the currency you are buying has a greater interest rate, i.e. the central bank interest rates of that currency are greater than the currency you are selling. However this better exchange rate is only available if you do not draw down for the duration of the contract. See below.

• Time option forward – This type of forward contract allows you to draw down in part or whole anytime within the duration of the contract at the agreed rate.

• A draw down – This procedure allows you to exchange funds, using your time option forward, at the rate agreed at the outset of the contract. You can use all or part of your contract at any time within its duration.


How does it work?

We always discuss at length with our customers the nature of their business and currency requirements as to what would be the most effective and appropriate strategy to take when entering in to one of these contracts. They do differ but can be equally beneficial depending on customer’s individual requirements.

They can work very effectively to negate the exchange rate risk for any individual or business that might have an exposure to the currency market.

For our corporate and private clients, we will always work to a fixed pre-agreed margin and discuss all fees and deposits, beforehand, as appropriate.

We will take care of the whole process and payment through our trusted chosen partners, who are all authorised by the Financial Conduct Authority (FCA) as an ‘Authorised Payment Institution’ API under the Payment Services Regulations 2009.

Why South West Foreign Exchange?
With 18 years in the foreign exchange industry, we offer a prompt, friendly and professional service.
However, without the overheads of many other foreign exchange companies and the overinflated charges imposed by banks, ours is a more cost-effective service.

What now?
Please call us on 01548 857009 today to discuss your requirements and see what a difference we
can make.

Contact SWFX for information on Forward Contracts Contact SWFX