Corporate and treasury solutions

Options for corporate and treasury

Our clients choose to maximize their opportunities from their currency transactions with our hedging strategies because they are so flexible and effective. Options are an increasingly popular hedging alternative to the more traditional Forward Contracts.

Why choose Options

In brief, an Option provides you with the right, but not the obligation, for an exchange of currency at an agreed rate at a date in the future. For this total flexibility, a premium would be charged. However, we generally structure our Options strategies to remove the upfront cost – this involves placing certain caveats around the trade pertaining to the performance of the currency pair over a defined timeframe.

Absolute protection

Option strategies can be extremely effective at giving you absolute protection against adverse movements in the currency markets. However, you will also have the potential to take advantage if the currency pair moves in your favour. Options are sometimes used as a stand-alone hedging tool although they are often used to complement Forward Contracts and Spot Transactions.

Managing risk

Options strategies allow you to concentrate on your day-to-day business, safe in the knowledge that you have managed your FX risk and given yourself the chance to benefit from opportunities, without paying for the privilege. Other commonly used strategies offer less certainty but can significantly outperform current market levels. Again, when used in conjunction with more conservative strategies, Options can offer significant enhancements to your P&L.

Important note about Options

Foreign exchange Options and other derivative products can carry a high level of risk to your capital and are not suitable for everyone. You should seek independent advice if necessary.

Get in touch

If you would prefer to discuss our FX Options or you would like to arrange a free risk management consultation, please get in touch.

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