Risk Advisory Services
We provide customized tools and tailored hedging strategies that meet our clients’ needs, objectives, and goals while remaining in line with their risk tolerance and internal policies. We deliver strategic advice, market insight, and a variety of products to our clients -- face-to-face, over the phone, and electronically. We work with our clients to identify currency exposures, establish FX budget rates, develop FX hedging strategies, and evaluate the effectiveness of FX risk management.
Exchange one currency for another for delivery two business days from the transaction date (with the exception of the Canadian dollar, which delivers one business day from the trade date). This is ideal if your company makes or receives payments in foreign currencies.
Exchange one currency for another for delivery beyond two business days from the transaction date. Forward rates are based on the spot rate adjusted by the interest rate differential between the two countries. If your company has predictable cash flows in foreign currencies, this can help protect against possible adverse movements of exchange rates.
Similar to a regular forward, a window forward is a contract that will settle during a future period. You may draw down the principal balance within the flexible delivery window period. This is ideal if your company has regular but unpredictable cash flows in foreign currencies. This type of contract gives you flexibility with the timing of the conversion while maintaining a set conversion rate throughout the window.
Use this synthetic contract to hedge foreign currency risk where no traditional forward market exists (such as China, India and Brazil). No delivery of foreign currency occurs under this contract: The contract is net settled in U.S. dollars to offset the change in market pricing of the hedged foreign currency. This is ideal if your company has foreign exchange exposure in countries where a freely traded forward market does not exist. This type of hedge is used to protect the margins on a U.S. dollar-based cash flow.
Foreign Currency Swap
This contract simultaneously combines the purchase and sale of one currency against another with two different value dates. A swap consists of a spot transaction and a forward transaction, executed simultaneously for the same quantity. This is ideal if your company already holds forward contracts that need to be adjusted due to timing issues or exposure changes. You can also use it to hedge intercompany loans in foreign currencies with predictable payback schedules.
Foreign Currency Option
This contract gives you the right, not the obligation, to buy or sell a currency using a call/put option against another at a specified rate (known as the strike price) at a specified date in the future. This is ideal if your company is willing to pay a premium hedge against downside risk while receiving unbounded upside potential.