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Tactical forwards - export

Australian Exporters - Example: Participating Forward (Exporter)

Current Market Parameters

Proposed Participating Forward

Spot:

.5175

Contract Rate (guaranteed rate):

.5215

Swap:

-.0016

Term:

3 months

Trigger Rate:

.4850

Outright:

.5159

The possible outcomes at the Expiration of the contract are:

  • Trigger at .4850 untouched during the term of the contract:
    Purchase AUD at either the prevailing Spot Rate or the Contract Rate, depending on which is more favourable.
  • Trigger at .4850 touched during the life of the contract:
    Purchase AUD at the Contract Rate.

The Participating Forward has provided guaranteed cover, while at the same time giving you the opportunity to benefit from a depreciating AUD down to and including .4851.

Example: Reward Forward (Exporter)

Current Market Parameters

Proposed Reward Forward

Spot:

.5175

Contract Rate (guaranteed rate):

.5215

Swap:

-.0016

Term:

3 months

Trigger Rate:

.5325

Outright:

.5159

The possible outcomes at the expiration of the contract are:

  • Trigger at .5325 touched during the term of the contract:
    Purchase AUD at either the prevailing Spot Rate or the Contract Rate, depending on which is more favourable.
  • Trigger at .5325 untouched during the life of the contract:
    Purchase AUD at the Contract Rate.

The Reward Forward has provided guaranteed cover. And if the Trigger Rate of .5325 has traded during the life of the contract, you have the opportunity to benefit from a depreciating AUD.

Example: Cylinder Forward (Exporter)

Current Market Parameters

Proposed Cylinder Forward

Spot:

.5175

Floor Rate (best case):

.5100

Swap:

-.0016

Term:

3 months

Ceiling Rate (worst case):

.5270

Outright:

.5159

The possible outcomes at the expiration of the contract are:

  • AUD/USD trading above .5270
    Purchase AUD at the Ceiling Rate of .5270
  • AUD/USD trading below .5100
    Purchase AUD at the Floor Rate of .5100
  • AUD/USD trading between .5270 and .5100
    Purchase AUD at the prevailing Spot Rate

The Cylinder Forward has provided guaranteed cover, while at the same time giving you the opportunity to benefit from the AUD depreciating down to .5100.

Example: Reset Forward (Exporter)

Current Market Parameters

Proposed Reset Forward

Spot:

.5175

Original Contract Rate:

.5225

Swap:

-.0016

Term:

3 months

Reset Contract Rate:

.5190

Outright:

.5159

Trigger Rate:

.4900

The possible outcomes at the expiration of the contract are:

  • Trigger at .4900 untouched during the term of the contract:
    Purchase AUD at either the prevailing Spot Rate or the Original Contract Rate, depending on which is the more favourable.
  • Trigger at .4900 touched during the life of the contract:
    Purchase AUD at the Reset Contract Rate.

The Reset Forward has provided guaranteed cover, while at the same time giving you the opportunity to benefit from a depreciating AUD down to and including .4901.

Need more information?

If you have any questions or want more information, you can contact us online or call us toll free on 1300 665 616.