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How to Sign the Right Contract
 

 

  
 

At LondonExpress we can help you to choose the right contract.

The contract is important, because as well as tailoring it to your particular transaction, it can secure you a better rate.

The kinds of options available are: spot contracts, fixed term forward contracts and forward time options contracts.

Our account managers will explain these to you, and help you decide which contract or combination of contracts is in your best interests.

  
     
  Spot Contract  
 

This contract is the one to use when you need the currency at once. It enables you to purchase your currency at today’s rate. The money is made available for delivery immediately on receipt of your cleared funds. It can either be transferred telegraphically to your designated account, or held on account pending your instructions.

  
     
  Fixed Term Forward Contract  
 

This contract is used where you have a future commitment to pay monies on a fixed date in the future, for example a stage payment on the purchase of a house under construction. You can fix the rate for up to 2 years ahead. The rate is fixed and locked in at the time of the agreement, and remains constant irrespective of fluctuating exchange rates.

It ensures that your financial commitment is fixed and constant in pounds sterling. It’s a form of insurance often used by large companies to ensure that their commitments or monies owed to them in foreign currency are fixed in value in pounds sterling

  
     
  Forward Time Option Contract  
 

This version is used where the date of future payments may change. With property under construction for example, the final payment will only be due when the building is completed. Few builders can predict precisely when a specific property will be finished, but they can realistically estimate a finish date within a three-month window. A Forward Time Option contract gives you the flexibility of electing to collect your currency at any time between two predetermined dates, up to 90 days apart.

An added advantage of a forward contract is that you only need to make a deposit between 5% and 10% of the contract value. This allows you to cap the cost of your future commitment, while retaining your capital until the payments are due.

  
     
 
 
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