We have examined the two main methods of covering an exchange rate fluctuations risk i.e. The traditional forward exchange contract, and The currency futures contract. An option is an agreement between two parties. One party grants the other the right to buy or sell an instrument under certain conditions. The instruments may be a stock,… Read More »
Mechanics of buying and selling foreign currency future Foreign Exchange Futures: Let us assume that in January an importing firm requires Swiss Franc 125,000 in three-month time. It purchases a SF12500 future contract through a broker at the rate of SF1 = $0.6600. the contract’s current value would be ($0.66SF SF125000) U.S, $82500. It would… Read More »
These are the markets that were “derived” from other markets. The first financial future contracts were derived from the foreign exchange market. A financial future contract is a contract to deliver or take delivery of a financial instrument at a future date. In some cases where delivery is difficult, the contract may be settled by… Read More »
Forward contracts versus Future contracts Commodity brokers use forward and futures contracts for which reason? Points of difference between forward contracts and financial futures are as under: Forward contracts are available in any amount, small or large, whereas financial future contracts are in standard size. Forward contracts are meant for bonafide trade transactions whereas in… Read More »
What is Cross Rate? The exchange rate of major international currencies are quoted with reference to their base currencies e.g. in London with reference to Pound sterling and in New York with reference to US Dollars. At times for transactions between two currencies whose rates are not quoted, a third currency rate may have to… Read More »
Advance Payment Guarantee A contractor who is awarded a contract may ask for advance payment in order to start the project. The project sponsor will, for this purpose, require an Advance Payment guarantee to the effect that the contractor will perform his contract and if he fails, he will refund to the project sponsor the… Read More »
Shipping Guarantee The need for such a guarantee arises when the goods have arrived destination before document of the title to goods i.e. Bill of Landing, Air waybill etc. Therefor in order to take delivery of the goods, the importer approaches his bank to issue a bank guarantee in favor of the carrier of goods… Read More »
Mortgage Payments The process of a mortgage for a house has been a common practice throughout and it’s not all new to the markets. People have been purchasing houses based on the mortgage setup from the ancient times and some or the other way the entire procedure for this setup is also almost same as… Read More »
Reverse Mortgage Counselor Factors To Consider To Find The Right Reverse Mortgage Counselor The government wants the applicants to complete the session with any of the reputed reverse mortgage counselors before the loan gets closed. For this, you should find the right counselor who can provide you with unbiased and good advice. If you want to meet… Read More »
Tips To Avoid Running Out Of Proceeds With Reverse Mortgage Most times, it is advertised that reverse mortgages are the secured source of income for the rest of the lives of senior people. However, they can but only under specific conditions. People who take this kind of loan can expect to run out of proceeds, which… Read More »