There are different types of FX exposure a company may face; transactional and operational. For businesses that trade overseas in different currencies, currency volatility and how to mitigate that risk is an important consideration.
A spot FX trade is a straightforward foreign currency exchange. Using real-time exchange rates, Monex Canada provides same-day, next-day, spot and foreign exchange transactions across a range of major, minor and exotic currencies.
Our FX forward contracts offer an effective solution for mitigating currency risk. Providing both certainty and flexibility for currency requirements, forward contracts can be used to help protect profit margins, cash flow and your bottom line from currency fluctuations. By fixing a price against a budgeted rate, you can help lower business costs on imports and exports, and secure a specified exchange rate for future payments in a foreign currency.
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.
Limit orders → 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.
Margin credit facilities
As part of our corporate foreign exchange offering, Monex can offer attractive, flexible margin credit facilities to accommodate deliverable FX hedging for up to 5 years. Subject to creditworthiness, these margin facilities may lower or remove the requirement to place initial and/or variation margin with us that would otherwise be required against any forward trades.
Pre-authorized debit (PADs)
Pre-authorized debits (PADs) offer a convenient, flexible and easy way to make payments automatically and settle trades. Clients can choose to allow automatic payments, either on a fixed date of every month or whenever a trade is initiated*.
*Monex Canada can only initiate a PAD if certain conditions are met. This service is only available to residents of Canada, the bank account being debited must be based in Canada and the currency debit should be in Canadian dollars or US dollars only.