Forward

Forward

  • The product

    The Non-deliverable forward allows trading of foreign exchange rates or future parities. It is used as a foreign currency hedge where the party has the obligation to either make or take a foreign currency payment at some point in the future. .

    Settlement occurs on the expiration date based on the difference between the register forward market rate and the market rate set as reference applied to notional operation amount.

    BM&FBOVESPA allows for the registration of currency Non-deliverable forward  with and without CCP.

  • The asset
    With CCP
    Base-currency Quoted currency Description Quotation Type
    United States Dollar Yen USDJPY Parity
    United States Dollar Real USDBRL Foreign Exchange Rate
    Euro Real EURBRL Foreign Exchange Rate
    Yen Real JPYBRL Foreign Exchange Rate
    Without CCP
    Base currency Quoted currency Description Quotation type
    Argentine peso Brazilian real ARSBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Argentine peso USDARS Parity
    Australian dollar Brazilian real AUDBRL Taxa de câmbio
    USD cross foreign exchange
    Australian dollar United States Dollar AUDUSD Parity
    Pound sterling Brazilian real GBPBRL Taxa de câmbio
    USD cross foreign exchange
    Pound sterling United States Dollar GBPUSD Parity
    Canadian dollar Brazilian real CADBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Canadian dollar USDCAD Parity
    Chilean peso Brazilian real CLPBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Chilean peso USDCLP Parity
    Colombian Peso Brazilian real COPBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Colombian Peso USDCOP Parity
    Danish krone Brazilian real DKKBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Danish krone USDDKK Parity
    Euro Brazilian real EURBRL Foreign Exchange rate
    USD cross foreign exchange
    Euro United States Dollar EURUSD Parity
    Hong Kong dollar Brazilian real HKDBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Hong Kong dollar USDHKD Parity
    Malaysian Ringgit Brazilian real MYRBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Malaysian Ringgit USDMYR Parity
    Mexican peso Brazilian real MXNBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Mexican peso USDMXN Parity
    Danish krone Brazilian real TRYBRL Taxa de câmbio
    USD cross foreign exchange
    United States Dollar Danish krone USDTRY Parity
    New Zealand dollar Brazilian real NZDBRL Taxa de câmbio
    USD cross foreign exchange
    New Zealand dollar United States Dollar NZDUSD Parity
    Russian ruble Brazilian real RUBBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Russian ruble USDRUB Parity
    Singapore dollar Brazilian real SGDBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Singapore dollar USDSGD Parity
    South African rand Brazilian real ZARBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar South African rand USDZAR Parity
    Swedish krona Brazilian real SEKBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Swedish krona USDSEK Parity
    Swiss franc Brazilian real CHFBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar Swiss franc USDCHF Parity
    United States Dollar Brazilian real USDBRL Foreign Exchange rate
    South Korean won Brazilian real KRWBRL Foreign Exchange rate
    USD cross foreign exchange
    United States Dollar South Korean won USDKRW Parity
  • Specifications
    Contract sizeFreely established by the parties, based on the base currency of the operation.
    Fixing dateWith CCP: day prior to the settlement date, when the parity or foreign exchange rate used as reference for the settlement process is considered. Without CCP: settlement parity or foreign exchange rate consideration date established in the contract, which may extend to the fifth business day prior to the due date.
    Expiration and settlement dayDate of calculation regarding the settlement value and establishment of the respective financial flow, freely established by the parties.
    Settlement procedureWith CCP: settlement is cleared through BM&FBOVESPA Clearing. Without CCP: settlement done directly by the parties.
    Warranty provisionEarly deposit of assets – as per regulation – is only required for operations with BM&FBOVESPA acting as CCP.
    Expiration periodFreely established between the parties.
    Settlement priceQuote considered on the fixing date, used as reference for settlement calculation purposes.
  • Benefits
    • Hedge against unwanted currency fluctuations;
    • Non-deliverable forward without CCP do not require early or intermediate adjustments, which occurs when hedging with options(which requires initial premium payments), or when trading futures market instruments (which require margin and  daily settlements adjustments), providing an effective protection for clients that lack of cash flow  management to handle intermediate disbursements; and
    • Non-deliverable forward with CCP mitigates credit risks to the parties, since BM&FBOVESPA guarantees the operations.
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