Currency hedging strategies

Currency hedging is the practice of protecting your business from unwanted exchange rate movements. This can be done via currency contracts or options, all of which have different functions and goals. Ultimately, however, these help to limit your exposure to market volatility and provide a more stable footing when trading.

With hedging solutions in place, you can manage your risk and essentially protect your funds against any exchange rate movements. 

Whether your organisation is an importer of goods from abroad, regularly receives payment in foreign currencies or relies on paying international staff in local currency, FX requirements increase your exposure to ever-fluctuating exchange rates.

While the price of imports, exports, services and wages may be relatively stable in many lines of business, the value of each transaction when made via an international payment can fluctuate greatly over the course of the year. As a result, it can be harder to estimate your income and outgoings, which of course can directly affect your profits.

Hedging allows you to protect yourself from any negative foreign exchange movements by potentially locking in a more favourable rate via one or several hedging options.

Your dedicated account manager can work with you to tailor make the ideal strategy for hedging your currency exposure. This could include utilising a range of currency contracts, including forwards, spots and market orders. Alternatively, hedging risk with options could be a more appropriate fit for your business. 

We offer a wide range of hedging options, all of which have their own unique benefits and requirements. Zero cost options exist to provide a contract that naturally require no up-front payment, while premium options command a fee, however aim to provide a better exchange rate. Alternatively, out-performance options offer a specialist means of hedging for businesses.

All of our solutions can be discussed with your account manager who will direct you to the accredited dealer.