Window Forward Contracts

With Akcenta, you can hedge your company against exchange rate risk for up to 1 year in advance as standard. We will prepare a tailor-made offer for each client.

If an importer or exporter is having difficulty estimating the future settlement date of receivables or obligations, they can always use hedging in the form of a window forward contract.

Window Forward contracts are based on the same principle as forward contracts, i.e. a precisely defined amount insured by a fixed exchange rate, with the sole exception that the settlement date is variable. The settlement date agreed in advance with a forward is replaced by a three- week interval (1 week before and 2 weeks after the settlement date), during which the currency can be exchanged on any business day at the rate agreed in advance. This instrument also enables companies to make better use of a fixed rate during calculations in their financial planning.

What are the advantages?

If the client has difficulty estimating the future maturity date of incoming payments or obligations, a forward with a floating maturity may be appropriate for the client.

This instrument also allows firms to make better use of fixed exchange rates in financial planning calculations while offering some flexibility in timing. We do not charge any fees for entering into a rolling forward.

Example of window forward

Importer client:

On 30 June, the client purchased goods from a supplier in the value of EUR 100,000 with a delivery period of 3 months. At the same time, they do not know exactly the date the payment for these goods will be made, and do not wish to be exposed to risk of exchange rate trends. On 30 June the client agrees on a forward rate with a settlement period from 26 September to 14 October, when they can purchase Euros on any business day, however no later than 14 October.

Client	Delivery	Amount	Settlement
Importer	In 3 months	100 000 EUR	from 26. 9. to 14. 10.

Settlement of the forward within the three-week settlement period is at the originally agreed forward rate and at no additional cost.

If the conversion trade is not executed/settled within the predetermined three-week settlement date of the forward, it is possible to postpone the settlement date by means of a swap trade and thus postpone its exhaustion to an appropriate time. In this case, the originally agreed forward trade will be revalued and a new forward trade will be entered into at current market values.

In case you are interested in this product and think that you would use it as an advantageous tool to reduce the risk related to your business, please do not hesitate to contact us.

What are the conditions for closing the forward?

Signing of a Framework Agreement for the provision of payment and investment services.
You are legally obliged to have LEI number.
Deposit of cash collateral or getting a Dealing limit.
Minimum amount per transaction is EUR 10,000 or equivalent in another currency.
Interested in more? Read other terms and conditions.

By entering into currency derivative transactions, the client assumes some types of risks (market risk – currency and interest rate risks, counterparty risk, liquidity risk, leverage). Everything always depends on the purpose and method of use of the derivative transaction concerned. Before signing a Framework Agreement and closing a transaction or at any time on request, dealers will be glad to explain you the individual types of risks, whether orally or in writing.

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The exchange rates shown are informative in nature; for the most up-to-date rates, please call +420 498 777 800. You can find current exchange rates in our Online Broker anytime.