Risk Reversal
In order to take out a Risk Reversal contract you need to advise us of the amount, the currencies involved, the expiry date and the budget rate at which you would like to buy foreign currency. We can then inform you of the best case rate for a zero cost structure.
How does a Risk Reversal work?
For example, you import materials from the US and have to pay a supplier $1,000.000 in six months time (sell GBP and buy USD). The forward rate for six months is 1.60. You would like to benefit from exchange rate. You inform us that you are prepared to accept a protection rate of 1.58. We then calculate the best case (which is dependant on market variables at the time) to be 1.68.
Key facts
- Premium will be required
- The protected rate will always be less favourable than the forward rate.
- You may be obliged to purchase your currency below the market price.
Advantages
- 100 % protection on the currency exposure.
- Benefit from favourable currency moves up to an agreed limit.
A dedicated corporate client adviser is ready to help
Please get in touch.
Contact details
5th Floor, 62 Cornhill
London, EC3V 3NH
Map and directions
We are situated in the heart of the city of London.
Nearest tube/DLR stations:
Bank
Liverpool Street
Aldgate
Monument
Nearest mainline rail stations:
Liverpool Street
Fenchurch Street
Cannon Street
