Forward Contracts - AUD/GBP

[Seventyseven7]

Hi All,

I need to transfer funds from a house sale to AUD. Currently, the exchange rate is close to a five-year high, so I want to secure this rate. I'm considering using multiple forward contracts over the next six months as a hedge. Can anyone recommend a reputable company that they have used before.

I want to make sure the full sum is protected, I'm only aware of FSCS, so assume there is a different body/protection used for this?

[trevalvole]

Seventyseven7 said:

I want to make sure the full sum is protected, I'm only aware of FSCS, so assume there is a different body/protection used for this?

With futures contracts, I suspect you are outside the world of consumer protection and instead have joined the world of counterparty risk.

[LooneyTunes]

Why not just FX it now? That way your rate is locked in…

[Seventyseven7]

LooneyTunes said:

Why not just FX it now? That way your rate is locked in…

It’s money from a house sale, so I don’t have the money to hand.

I also would like to lock in the rate at multiple times over the next 6 months to hedge the fluctuations.

[LooneyTunes]

Ahh, didn't realise you've not sold it yet.

Not sure who would do it for retail clients, but worth being aware that forwards are committed transactions (rather than options) with all that entails if your house transaction doesn't complete on time. They can have (or lose) value if the market moves, so you may need to put up and maintain margin.

They're also derivatives, so expect anyone providing them may also want you to be certified as HNWI and/or sophisticated investor.