My business has $800,000 in expenses in Poland every year, and I'm interested in buying a fixed term (1 year) forward currency contract hedging Polish zlotych against the U.S. Dollar. How ? How much would it cost ?
2007-11-16 06:36:04 · 2 answers · asked by jack_98 3 in Business & Finance ➔ Investing
The Zloty trades as both a futures contract and options on futures contracts at the Chicago Mercantile Exchange. However, the CME does not offer delayed quotes on the product, most likely due to low volume. You have to have a futures and/or options on futures account with a brokerage firm. I do not have one and the quote wouldn't be that useful anyway as it will change by the time you actually get an account with a brokerage firm. It is based upon the supply and demand at the time for futures contracts on the zloty. The CME offers a Sept 2008 and a December 2008 contract.
A forward contract would require you to find a trusted partner, as opposed to a futures contract, which requires down payments. I would contact either your bank here, a bank you may deal with in Poland, or a major US bank if you really want a forward contract. Certainly any of the money center banks could provide a forward contract, will they is another matter. If you bank at a principal money center bank already, go there first, they know you and will be able to assess your capacity to fulfill the obligations under a forward contract. From a bank's perspective, this is much like underwriting a commercial loan. They will depend upon your delivery of dollars and need to know you can do so at the required time.
2007-11-16 07:11:21 · answer #1 · answered by OPM 7 · 0⤊ 0⤋
Try contacting J.P. Morgan, they should have the specific services available for what you need.
2007-11-17 06:12:45 · answer #2 · answered by Lawrence E 4 · 0⤊ 0⤋