Case Studies Businesses

Spot Contract

An Aviation company had purchased a new Quality Control Bench from a supplier in Italy. The Bench cost EUR 165,000. The company was offered an exchange rate of 1.2136 by it’s bank. Using Pugnax FX Capital, the Aviation company was able to secure an exchange rate of 1.2408, saving it GBP 2,980.

Forward contract

Continental Shipping has ordered a shipment of containers from its suppliers in Australia.
The shipment cost around 4 million AUD (Australian Dollars) and it was to be delivered 3 months after the order was placed.
Continental Shipping noted that the Australian Dollar exchange rate was at the best level it had been all year, and entered into a Forward contract to buy 4 million AUD at a fixed exchange rate of 1.8325. Three months later the exchange rate had fallen to 1.8113 but Continental Shipping had secured their rate at 1.8325 saving them GBP 25,548.

Time Option

This is the same as a Forward Contract, which can be fixed anything up to two years in advance but with the option to access your funds between two pre-agreed dates.

Regular Payments

A UK based Trade Mark and Patent firm has to make Regular Monthly Payments to its offices in Paris and Madrid. Using its bank to make all its transfers, it encountered the problem of unfavourable exchange rates and long delays prior to the money arriving at its office locations. Using Pugnax FX Capital, the company has taken all the hassle out of the process. Its funds are now transferred to Pugnax FX Capital by standing order. When the funds arrive every month, they are exchanged at a good rate and sent immediately to Paris and Madrid, arriving safely and quickly, saving them approximately GBP 9,400 a year.

Stop Loss Order

An oil company wishes to purchase a new drill for one of its platforms in the Far East for USD 28,000. At the moment the GBP/USD exchange rate is 1.52. The company knows that at this exchange rate the drill will cost them GBP 18,421.05 but they are advised that the market is going to move in their favour. The company wants to limit the cost of the drill to GBP 18,500 and also have the flexibility to see if the exchange rate gets better. The company instruct Pugnax FX Capital to put in a Stop Loss Order to buy USD 28,000 at an exchange rate of 1.5135. If they are correct about the USD, they will get a better exchange rate and the drill will be cheaper but, if the exchange rate worsens, the currency required will automatically be purchased at 1.5135, limiting their cost to GBP 18,500 no mater what.

Limit Order

A large retailer has placed a significant order of USD 600,000 with one of it’s manufacturers in the USA.  The retailer was aware that the Dollar was at a current rate of 1.57 and as it was in no hurry to make the transfer and it wanted to achieve a rate of 1.60.  As advised by  Pugnax FX Capital the retailer arranged for a Limit Order contract to purchase USD 600,000 when the exchange rate reached 1.60. If the exchange rate peaks to a rate of 1.60, the retailer will have achieved its target and the Dollars will have been purchased at the desired exchange rate.

One Cancels Other (OCO)

This is a combination of a Limit Order and a Stop Loss depending on which is achieved first: One will Cancel the Other giving you upside combined with downside protection.