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What is a trade

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Information about What is a trade
Finance

Published on February 26, 2014

Author: jenniferhannahfx

Source: slideshare.net

Description

Discovering ways to save on your FX purchases by comparing price quotes
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What is a trade and how can you save money using an FX broker. What is a trade and how can you save money using an FX broker. A trade consists of two things 1. 2. Purchase of one currency from another Movement of that currency to a receiving bank account

What is the true price of your FX purchase? Rates of exchange move constantly throughout the day and evening. FX rates are ever changing, always moving. With each second of each day there is always a change in price when you quote your FX exchanges. With these changes comes risk. • Risk of movement in the wrong direction • Risk of not adhering to budgets, • Risk of the currencies moving beyond your personal risk tolerance levels. How can you control something that is always changing? Let’s first understand what a trade is. Who do you know that buys something from outside of Canada? What do they look like?

Shop around for better rates! Take control of the margin! Coast Capital Savings = 1.1340 Van City Savings= 1.133750 TD Bank= 1.1378 You could lose up to 3% from the going market rate just in trade rate alone for USD purchases. Royal Bank= 1.1384 BMO 1.1345 **NB EUR is at 653 points from the market! MTFX 1.1184 The current ASK rate is at 1.1084

Lets do the math on trade rates Customer uses TD Bank to buy their purchases VS MTFX TD Bank MTFX Inc $20,000per month x12 months @3% margin 20,000x12= 240,000 240,000x3%= $7200 $20,000 per month x12 months @ 1% margin 20,000x12=240000 240,000x1%-2400 $7200 USD equivalent in margin on FX $2400 USD equivalent in margin on FX $4800 difference in trade rate vs market rate How long does it take your company to make $4800 dollars?

The FX purchase and risk mitigation tools that you can use! With the ever changing markets, there is help. Help from someone that deals with clients like yourself. Risk mitigation tools for FX purchases can help you with your purchases address and assess your risk levels. Spot Trades--- At the moment, you want to send funds now internationally, and no time to hedge your risk. -- FX brokers help by offering competitive pricing on the trade rates. Market Orders– if you have some time to wait for your purchase, place in an order to purchase at a set target rate. Pick a price of the trade rate. If the rates of exchanges move enough to make it to that rate, the trade is electronically posted at that set rate. Still using competitive pricing too! Market orders don’t sleep, so you can! Forward Contracts– Take the current rate and extend the purchase to a set date up to a year in advance, know what you are paying for your FX purchases in advance! Use a blend of the market orders to get a specific target, hedge your contracts for best possible hedging and dollar cost average your contracts!

What is your time worth? Are you sending your international payments Wait in your bank lineup During your lunch break to send a wire. Like this Bank wire fees: $25.00-$45.00 Turn around time no guarantee: 24 hours – two weeks, within Canada, US or international.

Or like this? Email MTFX your wire instructions A template is created within minutes of receiving instructions. No re-keying of data for the next time you want to send money to this recipient. Wire fees: 0-5000 =$10.00 Over 5000 for a trade=NO WIRE FEE Or like this? Turn around time: Within Canada same day US- 24 hours International- 48 hours

Having an FX broker is like having peace of mind….. H Having an FX broker IS like having peace of mind They help you. • • • • They understand the market rates They help you assess your risks and address your risks They help you get the best possible prices on your FX purchases They work with you to get the funds to their destination on time Contact me if you have any questions about FX. Jennifer Hannah Senior Corporate Trader MTFX Jennifer.Hannah@mtfx.ca

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