How to set up option-dated forwards on ATB FX
Forward contracts can help businesses plan for the future by providing certainty about exchange rates. Learn how to lock in your rate for future transactions to eliminate market uncertainty and confidently predict your costs and related pricing on goods and services. Single-dated forwards are useful for confirmed future obligations for a specific amount on a specific date, while option-dated forwards are useful for flexible or recurring transaction dates for a specific total amount.
How to set up option-dated forwards
Buying example: You own a tire shop and import winter tires from Europe. You know what customer demand will be over the winter season but, depending on when winter arrives, this demand can start anytime between September and December. Your warehouse is too small to order all the tires at once, so you have to stagger your orders and your payments. Due to competition and tight margins, fluctuations in the price of euro can severely impact your business. With option-dated forwards, you can secure the euro rate so you can confidently price your tires without worrying about the foreign exchange market. More-so, because of your unknown timeline on customer tire orders, you have the flexibility to draw down on the contract whenever necessary.
Selling example: You invoice your services to companies located in the United States. These companies pay you by wiring US dollars into your ATB US dollar account. You know the total amount you'll be paid, but not necessarily when, and all your company's payables are in Canadian dollars. To ensure that the value of the US dollars you receive covers your operating expenses, you can use option-dated forwards to secure a rate and draw down on the total amount of the contract as a receivable comes in.
- Log in to ATB FX
- Since you’ve enrolled in two-factor authentication, you will be asked to verify your identity.
- From the Home screen, click Time Option in the primary navigation.
- On the Time Option screen (Step 1), note the selected defaults (based on your preferences).
- From the Currency drop-down menu (to the right of the Buy option), select the required currency for purchase (e.g. USD - US Dollar).
- If you’re setting up a sell transaction, change Buy to Sell and then select from the second/lower Currency drop-down menu.
- Whether buying or selling, you are required to draw down on the the entire dated contract by the final maturity date (any outstanding contract amount will be automatically drawn down at that time).
- Enter the Amount of the selected currency you want to buy or sell.
- Select the preferred Tenor of your trade(s) and the desired Start Date will be determined automatically based on your selection; do the same for the End Date.
- Changing the Start Date or End Date will likewise change the related Tenor.
- Option-dated forwards support a maximum Tenor of three months.
- Click Request Quote.
- Step 2 of the Time Option screen will display a real-time quote for your trade; you should see the exchange rate and the total cost to your account.
- The rate is refreshed regularly and you have a limited time to complete this step before the stream times out.
- Click Submit Time Option to secure your preferred rate.
- Once you click BOOK, a trade is made at that rate and cannot be cancelled. If you book a trade accidentally, call the ATB Foreign Exchange Desk immediately at 1-855-282-3939 (select Option 1); if outside business hours, send an email to firstname.lastname@example.org so our team can explore your options, such as reselling your funds back at market price.
- Step 3 of the Time Option screen will display a confirmation of your trade.
- You have the option to drawdown the transaction now (click Drawdown Now) or later (click Drawdown Later).
- You’ll can find trades that still require settlement instructions by clicking  Incomplete Settlement in the Notifications widget (top right),  Settlement Instructions in the primary navigation or  the Incomplete Settlement tab at the bottom left of the screen.
- The Time Option Drawdown screen will display the details of option-dated trade.
- Under the Drawdown Details heading, click +Add new to add new drawdown instructions.
- Enter the Amount you want to drawdown.
- Select the Drawdown Date.
- If you want to save the instructions and come back to them later, click Save.
- If you’re happy with the instructions, click Submit.
- If your profile is set up as a dual authority, you’ll need to engage another user in your company to approve before 3pm MT.
[Shorter/Bubble version: For dual authority profiles, approval must be obtained before 3pm MT.]
- You’re all done!
To learn more about the ATB FX, visit the ATB FX Help page.
The ATB Financial Markets team is here to make ATB FX work for you. Call 1-855-282-3939 or email email@example.com for any help you need.