Risk Management

The foreign currency market is extremely volatile. Significant exchange rate shifts can occur in a matter of weeks as a result of any number of political, social and economic factors, and while you can predict market trends to a certain extent there are no guarantees.

For a business to be successful it needs to maximise profitability, and for a company with foreign exchange commitments this means taking a proactive approach to risk management.

Once you’ve opened an account with Pickfords FX, your Account Manager will talk you through all your options and help you pick the best transfer solutions for your requirements.

Some tools you may want to consider include:

Forward Contracts

With a forward contract you have the option of ‘fixing’ a favourable exchange rate. Once the rate is fixed, you can conduct a trade at anytime within the next two years at that rate. This allows you to budget effectively and ensures that you won’t lose out if the market moves against you.

Stop Loss Order

A stop loss order allows you to pre-set a minimum or maximum rate for purchasing your currency. Once the market falls (or rises) to this level, the currency is automatically traded.

Limit Order

A limit order is when you place an order to purchase currency at a pre-determined rate. The agreed rate is better than that currently available and the currency is bought once the market rises to that level.

Get in touch if you’d like to find out more about how Pickfords FX could help your company manage its risk and maximise its profitability.