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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?
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