HSBC has the expertise to help you with all your Treasury forecasting and risk management needs. We provide comprehensive foreign exchange services to corporate and institutional clients in Spot, Forward, and Currency options. We work on helping you find the best solutions to hedge currency exposures ranging from emerging to G7 currencies.
Spot Contracts
A spot contract is a binding obligation to buy or sell a certain amount of foreign currency at the current market rate, for settlement in two business days time. To enter into a spot deal you advise us of the amount, both currencies involved and which currency you would like to buy or sell.
Key features and benefits:
- Wide range of currencies
- Benefit from favourable movements in the spot rate until the deal is done
- Unprotected against unfavourable movements in the spot rate until the deal is done
Forward Exchange Contract
A Forward Exchange Contract is the simplest method of covering exchange risk, without having to worry whether the spot market is going to move against you. This enables you to budget at a guaranteed rate of exchange.
Key features and benefits:
- Protection against adverse movements in exchange rates
- A binding obligation to deal at a specific rate
- No upfront cost involved
Pricing
The price of a forward contract is based on the spot rate at the time the deal is booked, with an adjustment, which represents the interest rate differential between the two currencies concerned.
HSBC Bank Bermuda Limited is licensed to conduct investment business by the Bermuda Monetary Authority. This is not a recommendation, offer or solicitation to purchase or sell any security, commodity, currency or other instrument. The information provided herein does not consider specific objectives, circumstances or needs of individual recipients. The use of commodity or financial futures, foreign exchange contracts, investments and index contracts and options thereon involve special risks. Investors should be aware that the risk of loss from investing in these types of securities can be substantial and should therefore be able, financially and otherwise, to assume the risks of such transactions. Readers of this information should seek financial advice regarding the appropriateness of investing in any security, commodity, currency or derivative instrument or strategy contained herein.
