Throughout the site you will see references to different types of contract and orders. We hope this page will help you to gain a clear understanding of these terms but please feel free to contact us for more information.

Spot Contract

A trade is agreed based on the current market rate in the live market. A client can call their account manager and book the exchange rate instantly. Once this is done, Omnis FX will transfer the currency to the nominated account on receiving funds.

Forward Contracts

Forward contracts allow the client to agree an exchange rate for their currency and fix it for up to 24 months. Clients are asked for an agreed deposit to secure the rate. The client then has access to their funds at the fixed rate given on entry at any time. This is ideal for a variety of property transactions.

Example
Scenario
A Spanish swimming pool distributor buys stock from both the US and Australia to resell in Europe. The company had previously used their Spanish bank to transfer funds when required. As the sale price agreed with retail outlets is fixed seasonally this left the company exposed to unnecessary currency risk.

Solution
During the review, it was recognised that invoices were paid quarterly and as the business is well established, the transaction amounts can be predicted with a good degree of accuracy. Using this information along with the cyclical nature of the business it was decided to use a forward contract to fix the rate over the course of the year. In doing so the profit margin could be accurately predicted and cash flow properly managed.

Limit orders

If you only wish to exchange your funds at a specified rate, your account manager can monitor the market and buy the currency at the level agreed.

Stop orders

Stop orders can be used to protect against the exchange rate moving adversely. It can also be used to allow clients to lock in a worst case scenario while holding out for a better rate.