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Amortizing forward

An Amortizing forward is based on similar conditions to those of a standard forward, and can be used in cases when it is difficult to define the exact settlement date and the volume of the individual transactions in advance. During the agreed period it is possible at any time to exchange currency at the agreed exchange rate, however the individual conversions need not be specified in advance, and can take place on any business day in the given period and at any amount up to the total value of the amortizing forward.
Conditions for securing an amortizing forward:
This client expects payments from international companies that have up to 12 months, i.e. by 31 December to pay EUR 500,000 for goods purchased. They agreed on a forward contract which gives the client certainty ahead of time on the exchange rate for which all currency conversions will be done by December 31 (forward exchange rate).
date payment received 31 March 30 June 30 September 31 December
agreed rate 23.700 23.700 23.700 23.700
actual rate 23.850 23.750 23.600 23.650
payment received
100.000 125.000 150.000 125.000
difference [in CZK] -15.000 -6.250 15.000 6.250
All redemption during the duration of the amortization forward is for the originally agreed forward rate and no additional costs.
In the event that this product has caught your interest and you think you would like to use it as a suitable instrument for limiting risks associated with your business activities, don't hesitate to contact the AKCENTA CZ dealing centre.
When closing derivative transactions, the client undertakes selected types of risks (market - currency and interest, counterparty risk, liquidity risk, and leverage). The risks always depend on the purpose and method of using the derivative transactions. Before signing the General Agreement and concluding the trade, or at any time upon request, the traders will be happy to explain the different types of risks both verbally and in writing.
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Bratislava - AKCENTA CZ has been active in Slovakia since 2011
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AKCENTA CZ a.s. does not assume any liability for any damage or loss of profit caused to any parties by using the information and data contained on this website or in the company’s marketing material. AKCENTA CZ a.s. warns that entering into derivative transactions mentioned on this website or in the company’s marketing material involves risks. Clients are obligated, to the broadest extent possible, to familiarise themselves with these risks, understand them and take them into consideration and, if necessary, to ask for further information. More details on the risks related to derivative transactions are available on the website of AKCENTA CZ a.s.: Selected risks related to closing derivative transactions. Information on the risks can be also obtained from the employees of AKCENTA CZ a.s.
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