Client: Antiques Dealer based in Georgia
- °ä³Ü°ù°ù±ð²Ô³¦²âÌý·¡³æ±è´Ç²õ³Ü°ù±ð:Ìý€55°
- Product(s):ÌýMarket Orders, Window ForwardÌý
- Hedge Ratio:Ìý100%Ìý
The StoryÌý
An antiques dealer based in Georgia has followed news surrounding an upcomingÌýreferendum electionÌýin Britain. The clientÌýunderstoodÌýthat the British pound (GBP)Ìýwas poised to be strongly impacted by the results of the election. OurÌýpersonalÌýspecialistsÌýhelped the President tailor a strategy thatÌýhelpedÌýtake advantage of a positive rate move, and protect from a negative rate move.Ìý
OurÌýpersonal specialistsÌýproactivelyÌýmonitored the situation and kept the client up to date with market moves and °Ä²Ê¿ª½±Íø’ own forecasts.Ìý
TheÌýChallengeÌý
The clientÌýestimated theirÌýcurrency exposure for the year.ÌýThe clientÌýbelievedÌýthe rate would move in their favor and wantedÌýto capitalize on a positive market move, but didÌýnot want to tie up the company’s cash flow in purchasing the funds in full.ÌýÌý
The StrategyÌý
In order to protect from wild market volatility aÌýstrategy was drawn up by their °Ä²Ê¿ª½±ÍøÌýspecialist,ÌýwhichÌýinvolved using a combination of:Ìý
- 55K GBP (100%) take-profit and stop-loss market orderÌý
- 55K GBP (100%) window forward opening after the market order hits and closing 12 months outÌý
With the guidance of their °Ä²Ê¿ª½±ÍøÌýspecialist, they evaluatedÌýthe company’s risk toleranceÌýand decidedÌýto place take-profit and stop-loss market orders.ÌýThe take-profit order ensured that if the rate movedÌýin the client’s favor the pre-specified rateÌýwouldÌýbe automatically locked in.ÌýThe stop-loss order ensuredÌýthat if the rate movedÌýagainst the client’s favor the pre-specified rateÌýwouldÌýbe automatically secured at an acceptable loss to the company.ÌýÌý
To avoid tying up the company’s cashÌýflow once the market order hit, the order would beÌýrolled into a window forward. ThisÌýwouldÌýallow the client toÌýdraw-down the fundsÌýat the amount and timeÌýneededÌýthroughout the year.Ìý
The OutcomeÌý
The combined strategy enabled the client to take advantage ofÌýtheir ideal rate, saving $—Ìýthan if they purchased the currency prior to the election.
