Spot Contracts Spot Contracts are agreements to buy or sell one currency in exchange for another. For small business owners who can't always forecast their needs for a variety of foreign currencies, Spot Contracts allows you to buy or sell currency as needed based on the prevailing "spot exchange rate". Forward Contracts A Forward Contract allows a company to buy or sell one currency against another, for settlement at a predetermined date in the future. Unlike Spot Contracts, a Forward Contract eliminates the risk of fluctuating exchange rates by locking in a price today for a transaction that will take place in the future. This is called "hedging" the expected foreign currency transactions. Protecting your future cash flow against negative currency fluctuations can eliminate some of the uncertainty of doing business abroad. Forward Contracts are very valuable when the margin on a sale or a contract is low and even minor fluctuations in the exchange rate can affect profitability. Option-Dated Contracts An Option-Dated Contract is similar to a regular Forward Contract in all respects except that the owner of the contract can settle it at any time within a pre-set 30-day period. The total amount of the contract can be settled in increments within that period until the entire amount is delivered. Option-Dated Contracts are available in all commonly traded currencies. Cash Secured Forwards Cash Secured Forwards offers a non-credit solution to Small Business Customers that want to participate in a hedging strategy denominated in a foreign currency. A Cash Secured Forward Contract allows you to lock in a foreign exchange rate for a predetermined date. By entering into a forward contract, and posting cash-collateral up front, your company can protect future cash flows and eliminate the risk of fluctuating exchange rates that will take place in the future. For example, if you are planning to purchase equipment overseas in six months, a Forward Contract provides you with protection against any unfavourable movements in the FX market. Cash-collateral is based on a percentage of the amount and currency required Minimum amount per transaction is $10,000 USD or equivalent. A maximum may apply Term of 1 year or less Cash Secured Forward Contracts are available in- US Dollars Canadian Dollars British Pound Sterling Euros Japanese Yen Swiss Franc