Understanding Limit Orders: A Comprehensive Guide
A Limit Order can be a useful tool for managing currency exchange, especially if you’re waiting for a specific rate to meet your business goals. Here’s a breakdown to help you understand how it works and whether it’s the right option for you. What is a Limit Order? A Limit Order allows you to […]
Understanding Dual Currency Investment (DCI): Maximizing Returns in FX Markets
A Dual Currency Investment (DCI), also known as a Dual Currency Deposit (DCD), is a popular short-term structured product designed for currency investors seeking exposure to more than one currency. DCIs are linked to the performance of foreign exchange (FX) rates and offer the potential for higher returns than traditional deposits. However, they also carry […]
Structured Option – Leveraged Forward
A Leveraged Forward is a structured option that uses leverage to improve your Protection Rate when compared to a standard Forward contract. This means at expiry if the Protection Rate is worse than the Spot Rate then you are obligated to settle on a leveraged amount which might occur a larger Out-of-the-Money (OTM) position. The […]
Structured Option – Participating Forward
A Participating Forward is a type of structured option that allows you to set a Forward Protection Rate. This option enables you to benefit from favorable exchange rate movements by allowing you to trade a pre-agreed percentage of your contract value at a more favorable Spot Rate. At the same time, it hedges 100% of […]
Structured Option – Collar Option
A Collar Option is a type of Structured Option which allows you to protect against the risk that the Spot Rate will be less favorable than a nominated Protection Rate. It also gives you the ability to participate in favorable movements in the spot market between your nominated rate and a Best-Case Rate. Collar Option […]
Understanding Spot FX Contracts: A Comprehensive Guide
Spot contracts are key tools in the foreign exchange market, used to buy and sell currencies at the current market rate, or “on the spot.” Settlement usually happens within two business days, referred to as the Value Date. For example, let’s say an Australian Importer need to pay a supplier in the UK. They request […]
Structured Options – Forward with Knock-in Barrier
What is Structured Options – Forward with Knock-in Barrier? A Forward with Knock-In Barrier is a type of Structured option that allows you to lock in a worst-case rate and benefit from movements in the exchange rate up to the Option Knock-In Barrier rate. If the exchange rate touches the Knock-In Barrier rate, you will […]
Structured Option – Seagull Option
What is Structured Options ? A Seagull Option is a Structured Option which allows you to hedge your exposure. It involves three (3) Option legs with the risk usually lower than the level of a standard Forward. However, as a trade-off, your protection is capped at a pre-determined level. If the exchange rate moves against […]
Understanding Option Contracts: A Comprehensive Guide
Managing currency risks is essential for businesses and investors in today’s unpredictable global markets. Foreign exchange (FX) options offer a versatile solution, allowing market participants to hedge against adverse currency movements while benefiting from favorable shifts. This guide will cover the basics of vanilla option contracts and delve into the more advanced offerings of structured […]
Understanding Forward Contracts: A Comprehensive Guide
A Forward Contract, often referred to simply as a “Forward,” is a powerful financial tool that allows businesses and investors to manage risks and plan for future transactions with confidence. But what exactly is a Forward Contract, and how does it work? What is a Forward Contract? A Forward Contract is a type of […]
