Forward contracts enable you to reserve a 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. They can be an important part of a company’s hedging toolkit because they remove any concerns over the unpredictability of currency markets, enabling you to focus on running your business.
Identify Currency Risk Using Our Handy Tool
You can use the calculator below to identify the currency risks you could have exposed your business to by using spot contracts rather than forward contracts over the last 12 months. It is important to bear in mind that the past is not necessarily indicative of the future, so there is no way of knowing how the next 12 months will pan out for the currency pairing you select. However, we believe this tool highlights how quickly and significantly currency markets can change. By helping our clients understand how much they could have lost over the last year, we want to illustrate how effective forward contracts can be in protecting your business’s profits, margins and bottom line.
Find out how much Forward Contracts could save your business
“Forward contracts allow us to lock in a rate and know exactly what the season will cost us. It also lets us know what we will be able to achieve, profit-wise. We have a good relationship with Smart Currency Business. We get currency providers ringing us up almost every day, but we’ve been with Smart Currency Business for a while. I have recommended Smart Currency Business to others; it’s a great company to work with. Very straightforward. And there’s a personal service, a personal touch.”John Snare