FX Spot and Forward Contracts
Foreign exchange is simply the exchange of one currency for another, but it can take many forms. This article covers the two basic foreign exchange products - spot and forward exchange contracts. A spot contract is a binding obligation to buy or sell a certain amount of foreign currency at the current market rate, for settlement in two business days' time. To enter into a spot deal, you advise us of the amount, the two currencies involved and which currency you would like to buy or sell.
A spot deal will settle (in other words, the physical exchange of currencies) two working days after the deal is struck. The difference between the deal and settlement date reflects both the need to arrange the transfer of funds and, the time difference between the currency centers involved.
HRbank trades spot and forward contracts in any convertible currency pair, including those in emerging-market currencies. CROWN FINANCIAL MERCHANT BANK offers direct dealing services that enable you to speculate, access market views or get advice on FX risk and hedging solutions.
Any financial instrument that locks in a future foreign exchange rate. These can be used by currency or forex traders, as well as large multinational corporations. The latter often uses these products when they expect to receive large amounts of money in the future but want to hedge their exposure to currency exchange risk. Financial instruments that fall into this category include currency options contracts, currency swaps, forward contracts and futures contracts.
HRbank can tailor FX derivatives to suit you, while providing the liquidity you need. We have a dedicated team of trading and structuring professionals ready to support you in risk management and flexible hedging.
HRbank can offer exposure to FX moves through various structures, including over-the-counter and structured products, with varying degrees of capital protection and enhanced returns depending on prevailing market conditions.