020 7898 0500Overview
Forward Contracts
Forward contracts allow you to secure a fixed price for buying or selling currencies on a specific date in the future. The price you lock in is determined on the day you agree the amount and settlement date for the forward contract.
Forward contracts are particularly useful for businesses that have future payments or receipts in foreign currency because they allow you to protect your budget and profit margins. In this way, they can be an important part of a company’s hedging toolkit.
Types of Forward Contract available:
- Fixed Forwards: Exchange one currency for another on a fixed future date
- Open Forwards: Exchange one currency for another between the trade date and a date in the future
- Window Forwards: Exchange one currency for another between two dates in the future
- Non-Deliverable Forwards: Cash-settle the profit or loss upon maturity of a fixed forward
Our dedicated team of currency risk management experts are on hand to exchange your money into a variety of different currencies, enabling you to make instant international payments.
We are passionate about working closely with our clients to deliver a proactive, solution-led service. Our team will work with you to develop a bespoke strategy for managing risk.
We provide professional currency guidance on market movements that helps our clients minimise risk when making foreign currency exchanges.
Case Study
As strong as steel
Learn how we helped a steel manufacturer protect its budget through forward contracts.
Managing currency exposures is key in volatile commodity markets. Our team were able to implement a range of risk management strategies to mitigate this company’s exposures.
Protecting profit margins
Hedging strategies helped protect its budget
Managing risk
Forward contracts reduced its exposures
A blossoming relationship
We continue to work closely on complex projects
What makes us different
SmartHedge PRO
SmartHedge PRO is our currency management platform that makes tracking exposures simpler than ever. Developed and tested to address pressing challenges UK companies face, SmartHedge PRO offers automated solutions that allow business to spend less time pouring over spreadsheets and more time making the decisions that matter.
How we work
Trading with us is simple
Follow our streamlined steps to navigate currency markets effortlessly.
Open an account
Opening an account with Smart Currency Business is simple.
Quick and easy
Complete the enquiry form below, or give us a call.
Guided process
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FAQs
What is a currency forward contract?
A currency forward contract is an agreement that allows your business to lock in a current exchange rate for a transaction on a future date. It is designed to protect your business from exchange rate volatility and ensure that the cost of your international goods or services remains consistent and predictable.
How does a forward contract benefit my business?
Forward contracts help to create stable, predictable budgets and profit margins. By fixing your exchange rate in advance, you eliminate the risk of the market moving against you, allowing for accurate pricing and cashflow forecasting.
Do I have to pay the full amount upfront?
No, you do not need to pay the full amount immediately. Typically, a forward contract requires a small initial deposit (known as a margin), with the remaining balance due only at the contract’s maturity.
What is the difference between a Fixed Forward and a Window Forward?
A Fixed Forward contract is set for a specific date in the future, whereas a Window Forward allows you to access your currency at any time between two chosen dates, offering more flexibility for uncertain payment schedules.
What happens if the exchange rate improves after I book a forward?
A forward contract is a legal obligation. While it protects you from the market getting worse, you will not be able to benefit if the market rate improves. Forward contracts are best thought of as a risk management tool designed for stability rather than speculation.
