Find out more
Find out more
Find out more
Find out more
Find out more
The FX Spot transaction allows buying/selling of one currency in exchange for another in respect to any currency listed in the Bank’s exchange rates table. Settlement of the transaction takes place no later than within two business days from trade date.
ING Bank Śląski offers a wide spectrum of transaction currency pairs.
Transactions may be executed over
the telephone, directly using the internet banking system, or by written instruction.
An individual exchange rate may
be negotiated for amounts starting with EUR 10,000 or its equivalent in another currency.
The transaction may be executed
in reference to a foreign payment, document transaction or payment associated with an indexed credit.
Flexibility – transaction parameters (amount, exchange rate) are individually agreed with the Client and tailored.
Availability – relative low minimum amounts requirement allowing individual exchange rate negotiating.
The company has negotiated the following exchange rates:
Conversion of EUR 10,000 into PLN gives the company: 10,000 x 4.1150 = PLN 41 150.
Conversion of PLN 40,000 into EUR gives the company: 40,000 / 4.1550 = EUR 9 626.96.
The spot FX transaction carries market risk resulting from the possibility of adverse changes in exchange rates.
The forward foreign exchange transaction (FX Forward) is a transaction
of buying or selling currencies in the future at an exchange rate agreed at the time of trading. Such exchange rate will apply on the transaction settlement date, irrespectively of the then applicable market exchange rate.
The currency pair, settlement date, amounts in currencies and forward exchange rate at which purchase or sale of agreed currency will take place in the future are fixed at the trade date. This allows to hedge against an adverse movement in the exchange rates and precise projection of future financial result on the underlying business transactions.
ING Bank Śląski offers the following types of forward transactions depending on the manner in which the currency exchange transaction is settled:
- Forward – transaction settled by physical exchange of amounts in currencies between parties to the deal
- NDF (Non-Deliverable Forward) – transaction, where amounts resulting from difference between forward exchange rate fixed at the trade date and current negotiated spot exchange rate of the contract settlement date are settled, only. Parties to the transaction do not exchange physically nominal amounts involved in the transaction.
The Forward FX may be replaced by an NDF FX transaction and vice versa, not earlier than two days prior to the settlement date. Term of the transaction may also be shortened using the Rollback functionality with setting of a new, earlier settlement date and a new forward exchange rate in result of such changes.
Transactions may be executed in all currencies published in the Bank’s exchange rates table, with minimum transaction amount being EUR 10,000 or its equivalent in another currency.
Hedging against exchange rate movements.
Precise projection of the value of future settlements in currencies.
Pre-maturity settlement of the transaction.
For NDF transaction – settlement of currency difference without physical delivery of funds.
Flexible transaction parameters offered by ING Bank.
A company expects that it will have to buy EUR 50,000 in six months to pay for goods received. Expecting the exchange rate to increase, it may already today guarantee itself in the Forward FX transaction the exchange rate at which the currency will be purchased in 6 months. Today’s EUR/PLN spot rate is 4.15, and 6-month forward exchange rate is 4.20.
Thus, in a:
Forward ransaction, the company will purchase EUR 50,000 at a rate of 4.20, irrespectively of the market rate applicable in 6 months’ time, paying PLN 210 000
Non-Deliverable Forward transaction the following settlement of differences will take place:
- when market exchange rate on transaction settlement date increases and is 4.23, the Client receives: 50,000 x (4.23 – 4.20) = PLN 1,500.
- when market exchange rate on transaction settlement date decreases to 4.17, the Client shall have to pay to the Bank: 50,000 x (4.20 – 4.17) = PLN 1,500.
The payment profile of a Forward transaction for the Client buying currency is as follows:
The forward FX transaction carries low risk of mismatch between Client’s cash flows and Client’s obligations under the transaction, and market risk related with the possibility of adverse changes in exchange rates. If the forward FX transaction is entered into to hedge an open position or future FX payments, market risk is materially mitigated. The effects of changes in FX rates on the hedged position and the transaction neutralise each other.
Offer FX allows the Client making an buying offer / selling offer of one currency in exchange for another by exchange rates proposed by the Client. Client defines the time (date, hour) by when his offer can be accepted by the bank. If the Bank decides on accepting the offer, the transaction will be closed as a spot FX transaction.
Offers may be placed in all currencies available on the FX Trader platform.
The minimum transaction amount is EUR 2,000 or an equivalent in another currency.
When placing the offer the Client does not need to have funds in the account.
An FX offer can be settled with the use of funds in the account or with the use of settlement limit. The Client selects the manner of settlement at the time of placing the offer. In the first case, funds must be deposited in the debited account when the Bank accepts the offer – otherwise the offer shall be cancelled. In the second case, the Client does not need to have funds in the debited account when the Bank accepts the offer – the Client needs to deliver funds on the day the Bank accepts the offer.
The Client himself or herself determines the rate at which the Client wants to close the transaction.
The offer may be placed/cancelled on one’s own on logging in to the FX Trader platform.
The Client may cancel the offer at any time (provided that it has not been accepted by the Bank yet).
The company plans to pay EUR 50,000 for imported goods. To that end the company must buy euro.
Today’s spot rate for EUR/PLN is 4.2300 but the company wants to pay less for the currency - maximum 4.2000 for 1 EUR.
The Client decides that instead of checking the exchange rate on an on-going basis, the Client will present the Bank with the offer for purchase of EUR 50,000 at the rate 4.2000.
FX offer is subject to the risk that the offer placed by the Client will not be accepted by the Bank and the transaction offered by the Client will not be closed.
FX Alert is a service allowing the user to monitor currency exchange rates. The Bank monitors the currency exchange rates on an ongoing basis and sends alerts via text message and/or email if the exchange rate reaches the value specified by the user.
Alerts can be ordered for all currency pairs available on the platform.
Enabled alert monitors the expected exchange rate for up to one month following the date when the alert was requested.
Client does not have to continuously monitor the currency exchange rate – the Client receives an alert as soon as the exchange rate on the platform reaches the value expected by the Client.
Client selects the alert delivery mode: text message and/or email.
At any time, the Client can cancel the requested alert.
A company is planning to pay EUR 50,000 for the imported goods. To this end, they have to buy euros. The current spot rate for EUR/PLN is 4.2300, but the company would like to pay less for the currency – not more than 4.2000 for EUR 1. The Client decides that instead of monitoring the exchange rate all the time, he/she will request an FX alert at the Bank for the purchase of EUR 50,000 at 4.2000. The Client also agrees that the alert will be valid until the end of the week. If the expected exchange rate is recorded on the platform, the Bank will immediately send the Client the alert in the form predefined by the Client: text message and/or email.
The platform enables the user to make a valuation of call options or put options (in the FX options – Purchase – Valuation information tab) and basic option strategies: Risk Reversal and Participating Forward (in the Option strategies – valuation information tab).
Possibility to generate online valuation information on basic FX options and option strategies for the selected currency pairs.
Minimum value of options/ strategies being valuated is EUR 10,000/ USD 10,000, respectively.
Possibility to select the expiry date of the option/ strategy being valuated, from 3 days up to 1 year.
Possibility to print out the valuation along with its basic parameters and a short description of the evaluated option/ strategy.
User can quickly and independently generate valuation information for any selected parameters of the FX option/ strategy.
Possibility to quickly compare the FX Forward transaction with the FX Option having the same parameters.
you have just valuated the Risk Reversal strategy for the exporter, the aim whereof is to hedge your company against the currency exchange rate drop at a specific time in the future.
The main advantage of this strategy is the possibility to reduce or even eliminate the hedging cost by an adequate combination of two options.
It is possible, if you simultaneously purchase a put option and sell a call option at different strike prices, though usually with the same notional amount and expiration date. This is how you create the so called corridor for the future currency exchange rate and hedge yourself against exchange rate fluctuations that exceed a pre-determined corridor.
Parameters of your valuation:
Currency pair: EUR/PLN
Expiration date: 27 May 2015 11:00 a.m.
Transaction amount (purchased/ sold option): EUR 10,000.00/ EUR 10,000.00
Strike price of the purchased option: 4.1900
Strike price of the sold option: 4.2085
PREMIUM IN PLN: PLN 0.00
If the NBP fixing is lower than the strike price of the put option as at the strategy expiration date, you use the option you bought. In this case, the Bank pays out the exchange rate difference. If the NBP fixing is higher than the strike price of the call option, the Bank exercises the option bought from you. In this case you pay out the Bank the exchange rate difference. If the exchange rate is in the corridor, i.e. between the strike price of the put and call options, none of the parties is obliged to exercise the option.