CURRENCY RISK > Strategy > Timing > Pricing > Monitoring
Very few companies know the exact amount they pay to their bank or currency broker to buy or sell foreign currency. This income for the bank or broker is factored into the price and is not transparent. If a margin agreement is made, then the interesting thing to know is the rate at which the margin is calculated. Is it the bid or ask price, the mid price or some other basis? This is even more difficult to determine with forward transactions and other currency instruments such as the cylinder, flexible forward, profit share, etc.
ICC has the same real-time pricing systems as the major banks and has insight into all current currency rates as well as the margins that banks and brokers incorporate into the rates you are charged. We can reduce them to market-based levels and achieve savings that exceed or recoup a significant portion of our own advisory fee. If, for example, you buy $10 million on an annual basis, you will already recover our fee if you can buy those dollars at a EURUSD 0.0025 better rate through our effort in strategy, instrument selection, timing and pricing.
Are you curious what you pay in margin(s)? Then get in touch. We would be happy to perform a free margin check on some of your currency transactions.
