Forward Outrights

Trade Forward Outrights online with Saxo Bank

Saxo Bank offers FX Forward Outrights for purchase or sale of currencies at a fixed settlement date in the future. Almost the entire range of Forex Spot crosses is available as Forward Outrights with live tradable prices available through Saxo Bank platforms for the majority.

Forex Forward Outrights enable investors to take advantage of the interest rate differentials between two currencies, as well as to hedge foreign exchange exposure risks. By purchasing a currency for a future date at a fixed price now using a Forward Outright, individuals can avoid risky exposure to fluctuations in the exchange rate. Forwards Outrights are typically used for Forex trades with settlement dates longer than the fixed two-day settlement date for spot trades.

More on Forward Outrights

Trading Interest Rate Differentials

Forward Outright trading allows individuals to take advantage of interest rate differentials between two currencies. For example, when trading USDCHF as a Forward Outright, traders are effectively speculating on four rates: USD interest rate, CHF interest rate, USD/CHF spot rate, USD/CHF forward rate – the rate used to determine the current price for the future dated Forex transaction.

Hedging Exchange Rate Risks

Many companies dealing internationally experience volatility in Forex markets that can cause major uncertainties in profits and capital. To avoid these risks, Forward Outrights enable them to hedge foreign currency transactions for a future date at a Forex rate agreed now, thus neutralising exchange rate fluctuations.