Forwards

Do you purchase or sell foreign currency and want to avoid the negative consequences of rate fluctuations?

Fix the current rate for up to two years in advance.

The benefits of hedging against the exchange rate risk

Low deposits

Short-term forwards with a settlement within 10 calendar days require no deposit. For long-term forwards, you must pay a low deposit, or you can use the Treasury Line.

Comfort

Forwards will save you a significant amount of time and effort for up to two years in advance. You no longer need to monitor how the exchange rate develops.

Low limits

Amounts from EUR 10,000 or USD 10,000 can be hedged against exchange rate fluctuations. For other currencies, the equivalent of USD 10,000 applies.

Flexibility

According to your requirements, we can change the settlement date of the Forward we originally agreed upon.

Barbora Havířová

Thanks to forwards that we implement with Citfin, we are able to optimise our financial costs and thus minimise our exchange losses. We value our cooperation with Citfin greatly because they share the same values as our company, i.e. flexibility, professionalism and honesty.

Barbora Havířová
CFO, ICE Industrial Services a.s.

Helena Zumr Janů

We started as a small business five years ago and we had major problems in implementing forwards with a bigger bank with which we had been cooperating at the time. So we approached one of our good suppliers and he recommended us Citfin. We decided to try it and it was, I must say, a good decision.

Helena Zumr Janů
Managing Director, HD COMMODITY s.r.o.

Are you looking for advice or answers to your questions? Let us know, we’re happy to help.

We are available to you on working days from 8:00 am to 5:30 pm.

How it works

Before you can start using forwards, Citfin will explain all the details and conclude the Framework Agreement with you.

A future transaction can be arranged with the Dealing Department over the phone. The confirmation can be found in the internet banking system.

Then, you will send a small deposit to the Citfin account or use the Treasury Line’s assigned framework.

On the settlement date, you will transfer the remaining funds to complete the transaction.

Citfin will send the purchased currency according to your instructions.

More options, more savings

Standard Currency Forward

A currency forward with a window is a financial derivative that can secure the current exchange rate for a specific future date.

Case study

Currency Forward with a window

Purchase or sell a foreign currency at a rate agreed upon, where the foreign exchange transaction is settled within an “opening” of 3 to 60 days, and which is concluded for no more than 2 years.

Case study

Currency Par Forward

A series of currency forwards of the same currency pair with a single exchange rate and different settlement dates.

Case study

Currency Par Forward with a window

A series of currency forwards of the same currency pair with a single exchange rate and different settlement dates. For each of these future transactions, a settlement interval of 2 to 60 days can be chosen.

Case study

Currency Swap

The purchase or sale of one currency for another currency, with its subsequent sale or repurchase after a fixed period, at a pre-agreed exchange rate. It serves to overcome a temporary lack of liquidity in one currency, whilst there is simultaneously an excess of liquidity in another currency.

Case study

FAQ

  • The current spot exchange rate at the time of the forward
  • Pips, which express the difference between the interest of the sold or purchased currency for a period for which the forward is concluded
  • Citfin margin

In connection with the acquisition of a permit to trade securities pursuant to Section 6 of Act No. 256/2004 Sb., on business activities on the capital market, as amended (hereinafter the Capital Market Undertakings Act”), transposing Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (hereinafter “MiFID”) into the Czech law, which aims to increase the protection of clients who are provided with investments services and increase the transparency of capital markets, we would like to hereby inform our clients about certain changes related to the provision of investment services (future trades).

When providing investment services, the securities dealer shall:

  • Act honestly, fairly and professionally in accordance with the client’s interests,
  • Provide adequate and complete information, which cannot be unclear, misleading, deceptive or unfair,
  • Provide the clients with investment services that reflect the clients’ current situation.

Contents:

  1. Basic Company Information
  2. Investment Services and Instruments
  3. Categorisation of Clients
  4. Warning about the Risks Associated with the Use of Investment Instruments
  5. Conflict of Interests Policy
  6. Rules for Executing Orders
  7. Guarantee Fund of Securities Traders
  8. Rules of Handling Client’s Assets

The application for inclusion in the “Professional Client” category can be found HERE only in Czech!

For more information about the obligations and benefits of MiFID, visit the Czech National Bank’s website.

No, there are not. You will obtain a forward transaction rate and know how much foreign exchange you will purchase or sell in the future. You will pay no fees.

The rates differ in “pips” (points). These are added to the spot rate and are calculated based on the difference of the traded currencies’ interest rates. The difference in interest rates of both currencies is then reflected in the forward rate.

Yes and no. The agreed date of the transaction is fixed; however, the transaction settlement can be shifted to an earlier or later date than originally agreed upon by using swap transactions.

Small enterprises and sole traders may use future trades to avoid possible loss from exchange rate fluctuations.

By arranging a future transaction, you undertake to settle this transaction. At the same time, Citfin secures the market rate for you. The costs and risks from making this transaction are covered by the paid deposit, which we will return to you the moment the future transaction is settled.

The percentage coverage of your foreign exchange position changes depending on the rate development in the market. If the exchange rate deviates significantly from your hedged rate, the percentage of your deposit changes. This difference needs to be topped up.

It is not. Call our specialists at the Dealing Department, agree on the rate and settlement with them, and that is all you have to do. We will take care of all the rest, and you can enjoy the feeling of knowing, today, how much you will purchase or sell in the future.