Printer Friendly| Definitions | Current Spot Rates | Derivatives |
An exporter who enters into a Forward FX contract is obliged to deliver the currency to the bank on the specified date. However, a Forward FX Contract is not always appropriate because there remains a risk that the contract will not be won. Nevertheless, where an exporter is fairly confident of success, but not certain, some form of insurance against potential FX loss is needed. This is where Currency Options find a market.
Currency Options are rights, not obligations. They can be purchased to protect the downside FX risk while maintaining the possibility of upside gain from future FX market volatility.
If you are importing or exporting, for expert commercial foreign exchange services, speak to us at Raphael's Bank.
Quick and easy foreign exchange deals via our branch network, treasury centres or over the Internet.
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