Options products

If you regularly buy or sell currency and intend to hedge as part of your currency risk management strategy, our range of FX Options could help.

 

Flexibility to suit you

Through our subsidiary, Global Reach Markets Limited, we’re able to offer a range of Options which can help you manage currency risk.

These products offer greater flexibility than simple Spot and Forward contracts and can potentially form part of a hedging strategy that protects and benefits your business.

We can offer a further range of structured Options products if appropriate for your business. Speak to one of our qualified Options specialists to discuss the suitability of these products.

Options Products

The Participating Forward

A Participating Forward provides 100% protection. A strike rate and amount are initially agreed, and then the product allows for 50% participation in the event of any favourable market move.

Benefits, risks, advantages & disadvantages

  • This product requires no upfront premium to be paid
  • You have a 100% protection at your strike rate
  • You benefit from favourable market moves on 50% of your requirement
  • The strike rate will always be less favourable than a comparable forward rate
  • You may have to pay margin call
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Benefits of The Participating Forward

  • Your business is 100% protected against negative moves in the exchange rate
  • You are not required to pay a premium
  • Effective for short to medium-term risk management
  • The extent to which your business can benefit from favourable exchange rate moves is unlimited for 50% of the money that you require

Vanilla Protection

Vanilla Protection provides 100% protection against unfavourable exchange rate movement. A rate is agreed that provides protection, but allows for full participation in the event on any favourable market move. This product gives the buyer the right, but not the obligation to buy a pre-determined amount of currency at a specific price, on a certain date. This product is subject to an upfront premium. This product gives the buyer the right, but not the obligation to buy a pre-determined amount of currency at a specific price, on a certain date. This product is subject to an upfront premium.

Benefits, risks, advantages & disadvantages

  • You have 100% protection at your strike rate
  • You benefit for any favourable moves in the FX market
  • Once the premium is paid, you have no margin requirements
  • An upfront premium is required to undertake this hedge, this should be considered when comparing other products
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Benefits of Vanilla Protection

  • Your business is 100% protected against negative moves in the exchange rate
  • There is no limit to the potential benefits of favourable exchange rate moves
  • You don’t need any collateral or margin
  • You don’t have to buy at a higher spot rate if you don’t wish to