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Hedging with Forwards
Hedging Services
Hedging with Forwards
What is a forward?
A forward is a contract between the client and TFI Markets that locks in the exchange rate for the exchange of two currencies on a future date.
The forward contract can be tailored to reflect the exact amount of exposure and value date required by the client.
The client will initially deposit a margin with TFI Markets and at the value date the forward is closed-out and the client can either effect a payment or just settle the profit or loss from the contract.
What is a non-deliverable Forward?
Another variant of the forward contract that can be used as a hedging tool and is used primarily for covering exposure in illiquid or exotic currencies is the Non Deliverable Forward which works in the same way as a forward contract but at the value date instead of exchanging cash flows the two parties settle the Profit or Loss from the contract.
Click on the button below to view an Example which includes a comparison chart.
See Example
Risk Warning:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
52% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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TFI Markets Ltd
We specialise in currency conversion, third party payments and the provision of risk mitigate solutions to corporate clients.
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