Forward Contracts
Protect your profits from currency flux, with a Forward Contract.
Currency Strategy
When to consider a Forward Contract.
A Forward Contract is a type of hedging strategy. You lock in an exchange rate for a payment that will occur in the future, up to 12 months.
Certainty. You know exactly what you’ll be paying, no matter the currency fluctuations. This protects your profits and makes it easier to plan your finances.
*Forward Contracts are subject to advanced payments during the duration of your contract. For full details on advanced payments and deposit calls, please reference our Terms and Conditions. If you book a Forward Contract, it may mean losing out if the market rate improves because you’re contracted to settle at the agreed rate.
Global business is volatile. Forward Contracts help bring certainty.
If your future payments are in foreign currency, you’re at the mercy of global fluctuations. Lock in a rate and help protect your profits now, with a Forward Contract.
Manage your cashflow
Manage with confidence, knowing your profits and costs are locked in.
Forecast your costs
When you know the rate, you know your future costs and profits. Now you can plan with confidence.
*If you book a Forward Contract, it may mean losing out if the market rate improves because you’re contracted to settle at the agreed rate. Read more.
Whether it is $1K or $1M+, we got you.
We’ve been helping businesses make Forward Contracts for 25+ years. Our platform makes it fast and easy. Which means you can quickly protect an upcoming payment. Plus you get 24/7 access to our helpful FX Specialists.
Clients love us. Here’s why.
Robert Young, Director at Nichibo
This vehicle importer put price certainly into high gear with a Forward Contract.
We helped Nichibo, a vehicle importer/exporter, navigate exchange rate volatility and provide their clients with “service and certainty”.
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FAQs on Forward Contracts
Can everyone set up a Forward Contract?
All Forward Contracts are subject to approval by OFX. Conditions vary per market.
Is a Forward Contract right for me?
You might consider a Forward Contract if you’re committed to making a payment for goods or services in the next few months. You can also use a Forward Contract if you have an incoming payment, but you need to be certain that the payment will be made.
To continue to take advantage of exchange rate movements, some customers use a Forward Contract for only part of their liability as a way to partially hedge against volatility.
How is a Forward Contract rate calculated?
The exchange rate you’ll receive takes into account the market rate on the day you book your Forward Contract, a margin charged by OFX, and the central bank interest rates for the currencies you are exchanging.
Do I need to pay upfront when I book a Forward Contract?
You may be asked to pay a deposit when you book a Forward Contract. This is a fixed percentage of the value of the transaction – this is most often 10% for a personal account. However, this could be more or less depending on the duration and assessment of the Forward Contract and other factors. Your deposit is held until the maturity date specified in the Forward Contract. Please note, you must pay the remaining balance of the total amount due which is the difference between the Forward Contract and your deposit, in addition to any applicable fees by the maturity date. For more information contact us.
*If you book a Forward Contract, it may mean losing out if the market rate improves because you’re contracted to settle at the agreed rate. Read more.
Why do I need to make an advance payment?
Your advance payment is held as security for your completion of the contract until the maturity date. The advance payment is calculated as a percentage of the notional mark-to-market exposure of your Forward Contract. Mark-to-market exposure is the difference between your contracted rate and the current rate.
Do I need to wait until my Forward Contract matures to use the currency?
You have the option of early delivery at any point during the contract’s lifetime. When your Forward Contract matures you will need to settle the remaining amount. If you choose to deliver earlier than your agreed maturity date, the exchange rate may differ to your original contract. For more information on Forward Contracts visit this page or contact us.
Please note: If you book a Forward Contract, it may mean losing out if the market rate improves because you’re contracted to settle at the agreed rate. Read more.
What if I no longer need the Forward Contract?
If you want to cancel a Forward Contract, speak to your OFXpert as soon as possible. If we can cancel a Forward Contract, we sell back the currency that was bought at the time of booking, based on the current market rate. If the value of the currency you have asked us to exchange has decreased, a loss will be incurred on the Forward Contract. In this case, you will be liable to cover the loss, together with any reasonable expenses or other costs we incur as a result.
Please note: Booking a Forward Contract may mean losing out if the market rate improves because you’re contracted to settle at the agreed rate. Read more about considerations when booking a Forward Contract.
Is there a minimum amount for a Forward Contract?
Forward contracts typically start at C$10,000 but lower amounts may be considered.
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