Currency moves are hitting your margins. Here’s how to stop that.

Yes, but a forward is a legal obligation. If you no longer need the currency, the contract must be closed out at the current market rate. If the market has moved against you, there may be a cost to cancel the contract, known as a mark-to-market loss.

A broker can offer some of the same instruments including forwards, options and structured products, but the model is different. With a broker, you typically call or message to execute trades, pricing is relationship-dependent rather than shown transparently upfront and your ability to manage positions independently is more limited. A self-service platform gives you control, visibility and the ability to act when the market moves without waiting for a response.

While there is no strict minimum, hedging generally becomes a priority when a 3% to 5% move in exchange rates would significantly impact your profit margins. For most UK businesses, this point is usually reached when annual FX volume exceeds £200,000. Below this level, the risk may be manageable with simple spot transfers, but above it, the hidden costs of being unhedged start to compound quickly.

You can deposit collateral to get access to the most competitive rates. We will consider deposit-free hedging for businesses in the UK and EU; we’ll agree fair, transparent terms upfront visible in your dashboard. Our machine learning models make almost instant credit decisions to get you up and running in minutes, and that can save you lots of time versus a traditional bank or broker.

A forward may require an initial margin deposit or other security. How much this is, is dependant on the provider and the size and tenor of the trade

A forward contract does not “save” money by beating the market; it saves money by removing uncertainty. It allows you to lock in an exchange rate today for a payment you need to make in the future. This means that even if the currency market crashes before your invoice is due, your cost is already fixed at the agreed rate, protecting your profit margins from volatility.

However, it’s important to note,, if the market moves in your favour before settlement, you remain obligated to transact at the agreed rate and will not benefit from the improvement.

Most SMEs use forwards for periods between one month and one year. However, some specialist providers can offer tenors of up to ten years for very long-term projects

The main difference is obligation. A forward contract is a legal obligation to trade at the set rate on a set date. An FX option gives you the right, but not the obligation, to trade at that rate. For this flexibility, you pay an upfront, non-refundable premium. If the market rate is better than your option rate at the time of settlement, you can let the option lapse and trade at the better market rate.