Types of Currency Options

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Types of Currency Options

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Forward Contract

Forward Contracts is when you have five working days to one year foreign exchange purchases. Protection against rate movements by guaranteeing your exchange rate with automatic updates at each stage of your transfer

This is the purchase of currency needed for a specific date in the future from five working days to one year in advance. An exchange rate and maturity date is fixed with your account manager which secures your rate regardless of the future movements. On agreement a deposit of up to 10% is required with the remaining balance due by the agreed maturity date.

Spot Contract

Spot contract is when you have Immediate to five working days foreign exchange purchases with automatic updates at each stage of your transfer

This is the purchase of currency that is needed from immediately up to five working days. An exchange rate is agreed and the currency purchased on your behalf. A date is agreed upon for when you need your funds transferred based on your payment method with your Personal Account Manager and we will transfer the funds to the desired account upon receipt of your payment. Axia also keep you updated at every stage of your transfer with automatic e-mails confirming your trade, when your funds arrive and when they are transferred to the beneficiary. You will also be e-mailed a proof of transfer when your funds have been sent.

One Cancels Other (OCO)

The One Cancels Other trade allows you to set a best and worst case scenario and the rate is secured whichever level is achieved first.

One cancels other is where you are protected against adverse currency movements. So when aiming to achieve a better exchange rate you have set a worst rate scenario. You get automatic updates at each stage of your trade.

One Cancels Other is a combination of a Limit Order and a Stop Loss. Whilst it can be seen as ideal to place a Limit Order and try to achieve a rate better than the current market position there is always a chance that it may not be achieved and the exchange rate could move against you.

Stop Loss (SL)

Stop Loss protects you against adverse currency movements by setting a worst rate scenario while you are trying to achieve a better exchange with automatic updates at each stage of your trade.

A Stop Loss works in exactly the same way a Limit Order does but offers you protection should the exchange rate start to move in the wrong direction for you. You can set a Stop Loss order as a worst case scenario, meaning that if the rate moves against you, you are guaranteed that a worst case scenario rate is secured at a pre-agreed level so there is no risk of the rate getting any worse.

Limit Order (LO)

If there is a particular exchange rate you are looking to achieve, and have some time on your side then you can set up a Limit Order. A Limit Order allows you to set a rate that meets your expectation level. As soon as your desired exchange rate is achieved, the currency is automatically purchased for you regardless of what time zone it occurs. Once purchased your account manager will notify you to allow you to send in your settlement funds. Automatic updates at each stage of your trade

Time Option

Time Option is when you have three working days to one year foreign exchange purchases with flexible time windows to take receipt of your currency earlier. Protection against rate movements by guaranteeing your exchange rate with automatic updates at each stage of your transfer

This is very similar to a Forward Contract but with the ability to access your funds between two pre-agreed dates. For example if you don’t have a fixed date you need to transfer your funds you can secure your currency rate with a specified date range allowing you to pay for your currency when you want it transferred without any penalties.

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