When we book a Forward Contract for you we’ll request a deposit from you (which is industry-standard). This mitigates our risk in placing your Contract in the market with our counterparties.

We’ll ask you for between 5% and 10% of the value of the currency you are selling. This is a guide to the deposit you may need and the exact amount depends on things like the currencies involved, how far into the future you would like to fix a rate and your trading history with us. Of course, you can contact us and we’ll talk through your particular circumstances.

We may need to increase your deposit over the time period of your contract in order to maintain the agreed deposit level, for example if rates spike wildly. The more volatile a currency pair you book a forward for and the lower initial deposit you give are both factors that increase this likelihood. This is called a ‘margin call’. We can always return any surplus to you if rates revert. In any event any extra deposit isn’t an extra cost, it just means the balance you pay on the completion of the Forward is reduced.

How it works in simple terms:

1.You agree a fixed rate at which the money will transfer in the future

2.You then pay an initial deposit

3.Your rate will not fluctuate; you’ll know exactly what you’ll need to pay on the day

Our business clients find Forward Contracts really useful. Often they will call us in the early stages when they are negotiating a deal, to get and idea where they should be pricing. Businesses from film makers to farmers and everything in between take advantage of the protection an FC Exchange Forward Contract offers.