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For businesses that trade overseas in different currencies, currency volatility and how to mitigate that risk is an important consideration. We offer a range of commercial and deliverable foreign exchange and FX-related payment services, along with a variety of FX derivative products on either an advised or execution-only basis.
Spot FX
A spot FX trade is a straightforward foreign currency exchange. Using real-time exchange rates, we offer same-day, next day and spot foreign exchange transaction services in over 60 different currencies. We access multiple pools of liquidity to secure sharper pricing, enabling our clients to benefit from seamless execution and fast, secure settlement.
Market orders
A market order is an order to buy/sell a specified amount of currency at a predetermined rate of exchange not currently achievable. This allows you to get on with your day job and take advantage of market moves without having to keep track of the markets all day long. It also allows you to take advantage of any overnight volatility or illiquidity that you may not necessarily see in normal trading hours. MonFX offers two main types of market orders – limit orders and stop loss orders.
Limit order → Typically an order at a target rate better than where the market is currently trading.
A stop loss order → Typically an order to instruct a trade at a predetermined “worst case scenario” rate, to prevent further losses if the markets start to move against you.
FX hedging solutions
Clients may benefit from a tailored FX risk management and hedging policy due to the nature of FX risk. At MonFX, we help with creating and monitoring a hedging policy as markets and businesses evolve over time. Our team at MonFX can assist by analysing your FX exposure and creating a portfolio of Hedging Trades / Transactions / Positions (including but not limited to deliverable and non-deliverable FX forwards, swaps, and options) to diversify your approach. Upon implementation, the performance of the hedging programme will be closely monitored to ensure that it performs in line with your key objectives.
Please get in touch with your MonFX contact to speak with our derivatives structuring team to discuss how we can help you.
NDFs
A non-deliverable forward (NDF) is a type of contract that allows companies to offset the financial impact of currency movements. An NDF is most commonly used in markets where local currency controls restrict the availability of standard forward contracts, or where physical exchanges of currency are not required.
An NDF is a cash-settled forward contract. Instead of exchanging notional currency amounts on the value date, the trade is closed out. This generates either a positive or a negative cash flow that is usually directly opposite to the company’s underlying exposure. The benefits of an NDF are that companies can hedge a currency exposure to a restricted currency that would not be possible using traditional methods.
FX forwards
A forward contract is a customised over-the-counter (OTC) contract between two parties to buy or sell a currency at a specified price on a future date. It can be an effective solution to mitigate currency risk, providing certainty and flexibility with business costs such as global payroll, overseas invoices and intercompany transfers. A forward contract:
- Fixes the value of future international payments and receipts.
- Protects profit margins, cash flow and your bottom line from currency fluctuations.
Margin agreement
As part of our corporate foreign exchange offering, we can offer flexible margin to clients looking to hedge their FX exposures. Subject to creditworthiness, the margin agreement may lower or remove the requirement to place initial and/or variation margin with us that would otherwise be required against any forward trades.
Disclaimer: MonFX Pte Ltd. only offers over-the-counter derivatives contracts (such as option contracts) to accredited investors or institutional investors under the Securities and Futures Act 2001. If you do not qualify as an accredited investor or institutional investor, you should disregard the information contained herein and will not be able to execute the strategy outlined with MonFX Pte Ltd. Option contracts are complex instruments and come with the risk of losing more than the amount deposited with MonFX Pte Ltd (such as initial margin or variation margin).