Foreign Exchange

With a forward exchange transaction, you make arrangements with the bank on the rate at which you will buy or sell a particular currency later. This is called the 'forward rate'. In this way, you know exactly what you will pay or receive for your contract with a foreign business partner at the time of your future transaction.

This type of transaction, makes you less dependent on changes in the market. This gives you more certainty about the amount you will have to pay or receive in the future.

A swap is financial agreement between two parties to exchange cash flows in different currencies. With a foreign exchange swap, you can trade currencies with the bank for a set time. You agree to buy or sell a certain amount of foreign money to the bank and then do the opposite later at set exchange rates. For example, you can change extra foreign money into another currency or adjust the date of a previous trade.

An FX Roll is a special type of FX Swap. It lets you change the date you settle an open FX Forward position. Like an FX Swap, an FX Roll has two actions that happen at the same time. One cancels the original FX Forward trade on the first settlement date, and the other sets a new date.

Using an FX swap helps you avoid sudden changes in exchange rates, giving you more certainty about future payments or receipts.

This tool is helpful if there is a delay in receiving money, or if you need to pay sooner than expected. FX Roll transactions can be used for open FX Forward contracts through the Franx platform. On Franx, you can choose the trade for which you want to change the settlement date, and Franx will show you the current rates for the new date.

When you buy the FX Option, you have the right to buy or sell a certain amount of money at a set date and time. You don't have to do it if you don't want to. An FX Option helps you avoid bad changes in exchange rates. If the exchange rate changes in your favour, you can choose to buy or sell the currency at a better market price. To get the FX Option, you pay a one-time fee upfront.

An FX Option makes you less affected by changes in exchange rates. This means you have more certainty about how much you will pay or receive in the future.

You can also use a mix of different options, like call, put, or barrier options. Unlike a standard option, these might come with both rights and obligations. Some examples of these structured products are Cylinder, Forward Extra, and Synthetic Forward

Using a structured product helps protect you from sudden changes in exchange rates. This gives you more certainty about the amount you will pay or receive in the future.

A complete overview of all products and their associated features can be found in the PDF file.