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

Global Reach Markets Limited is a subsidiary of Global Reach Partners and is able to offer a range of Options products which can help manage currency risk.

These products offer greater flexibility than that offered by simple Spot and Forward contracts and could save you considerable amounts of money.

You will need to speak to a qualified Options specialist to discuss how Options can add value to your hedging strategy and to assess the suitability of these products for your business.

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

Risk Reversal

A Risk Reversal provides 100% protection against unfavourable exchange rate movements, whilst still allowing for full participation of favourable exchange rate movements to an agreed best-case rate.

Benefits, risks, advantages & disadvantages

  • You have 100% protection at your strike rate
  • You can benefit from favourable exchange rate movements up to the best-case rate
  • An upfront premium maybe required
  • You may have to pay margin call
  • If the best-case rate is exceeded, your business is obliged to buy at the best-case rate
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Benefits of Risk Reversal

  • 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

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

Windowed Forward Extra

A Windowed Forward Extra provides 100% protection against unfavourable exchange rate movement. It also allows for participation in the event of any favourable market movement, up to an agreed barrier level.

Benefits, risks, advantages & disadvantages

  • You have 100% protection at the strike rate
  • You benefit in any favourable exchange rate movement up to your barrier level
  • No upfront premium required
  • Strike rate will be lower than a Forward rate
  • You may have to pay margin call
  • If the barrier is reached you are obligated to buy at the strike rate
  • Favourable movements in the exchange rate are limited to the barrier level
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Benefits of Windowed Forward Extra

  • Your business is 100% protected against negative moves in the exchange rate
  • You’re not required to pay a premium
  • Effective for medium or long-term risk management