There are many ways to
Exchange and
Buy Currency. Here are some examples and
explanations of the most common
Currency Transfer methods
The most common type of
foreign exchange trade, it
refers to the next value date which is usually plus two
days; i.e. a trade placed today will be settled in two
days time. You can have same or next day delivery
dependant on the currency and time of day.
This valuable facility enables you to
transfer money
every month to pay for example, a
mortgage and fix the
rate if you so choose for up to 1 year. You will benefit
from knowing the exact cost of your
currency and your
mortgage therefore limiting any risk.
Low value spot trades - Transfers under £5k
IMS Foreign Exchange is one of the few companies able to offer our
wholesale prices on low value transfers. Most
foreign exchange
companies will not offer this below
£5,000.00
You can also choose to access this regularly through our
monthly regular re-payment plan.
This is a contract with a
fixed exchange rate for an
agreed period of time. The
currency is purchased today
for delivery in the future usually 12 months. The
forward price is calculated by using the difference
between the two currencies' interest rates. If you are
purchasing a currency
from a country with a higher
interest rate the forward price will be the spot price
plus a premium. If you are
purchasing currency from a
country with a lower interest rate the forward price
will be the spot price less a discount. There is usually
a deposit required for a
forward contract.
This term is used to describe the early delivery of part
or all of a
forward contract, there will be a slight
adjustment in
the exchange rate for the early delivery.
This is similar to a draw down, but an extension of the
forward contract
for all or part of the total amount,
again there will be a slight adjustment to
the exchange
rate.
This is a type of contract where the
currency is
purchased today with a fixed rate and the delivery can
be taken at any time between two pre arranged dates.
This is an order placed in the market below the
current
market price. It is used to control risk so when the
market gets to the price of the order, the order is
automatically triggered. It will act as a protective
order guaranteeing the price.
This is similar to a stop loss but is placed above the
currency market; this will be used to get a better price for the
currency exchange. A limit order will often be used in
conjunction with a stop loss to set a boundary for the
price no matter how volatile the market is.
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