Currency forward
When you know how much and when you will exchange.
Secure a predetermined exchange rate so you don't get caught off guard by market fluctuations.
Why use currency hedging with CYRRUS?
Predetermined conditions
You don't have to physically own the currency to arrange the exchange
No need to create an account
The best exchange rates
We have a CNB licence
How does a currency forward work?
- It's an instrument for hedging currency at a pre-agreed rate for a pre-determined date.
- The hedging is performed for a specific volume of funds for towards a determined date.
- We offer forwards in EUR and USD. The minimum insured amount is equivalent to EUR 10,000. You can change the forward settlement date.
- You can change the forward settlement date. If you need, we can simply move the value date of the forward.
Forward closing and settlement
You make a refundable deposit of 5% of the forward
The deposit is made in CZK after the commission agreement is signed and it is refundable.
When the deposit is credited, you can arrange the forward
The amount + exchange rate and date of settlement.
Once the forward is arranged, you will receive confirmation
Complete summary of all transaction parameters.
We will remind you one week before the forward value date
We will call you to remind you of the approaching settlement date.
The funds are transferred on the day of settlement
We will credit the funds to your financial account.
Exampe of currency forward (model situation)
The client has EUR 100,000 in his account as of 1 March 2024, he expects the CZK to strengthen and he wants to hedge it for 1 month.
The current spot rate is EUR 1 = CZK 24.70, the 1-month forward rate is EUR 1 = CZK 24.80.
The client concludes a 1-month forward contract for the sale of EUR 100,000 at an exchange rate of EUR 1 = CZK 24.80 with settlement on 1 April 2024.
He makes a 5% deposit, i.e. EUR 5,000 (the deposit is made in CZK and is refundable).
At settlement, he delivers EUR 100,000 to CYRRUS and CYRRUS returns CZK 2,480,000 to him.
If the client does not have the funds available to settle the forward, he can extend the forward (e.g. swap).
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