FORWARD - currency protection
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Whether you need to sell or buy currency in the future, with the help of forward contracts "Forward" benefit from the certainty of future financial flows.
Do you think you are exposed to a currency risk that could have a negative impact on your financial situation?
With the Forward contract you get rid of the uncertainty of the adverse evolution of the exchange rate.
With the Forward contract you can reduce your exposure to currency risk. Set the exchange rate now and make the currency exchange in the future.
The performance of Forward contracts is not guaranteed as it is subject to exchange rate fluctuations.
For trading you need to provide collateral to cover the adverse fluctuations of the exchange rate until maturity.
These are complex products regulated by MiFID II.
The Forward exchange rate is established on the basis of the spot exchange rate and the interest rate differential between the two currencies.
At the date of the transaction, the Forward contract is concluded by establishing the currencies involved, the direction, the trading amount (s), the forward exchange rate and the settlement date.