When it comes to making international bank payments, the range of different options for you and your currency can, at first glance, seem overwhelming. However, whether you’re purchasing large volumes of currency or receiving money from overseas, Hermex is here to help you choose the right contract for your needs. A spot contract is one of the three main types of transaction that we offer – for more details about your other options for overseas payments; take a look at our Forward Contracts and Market Orders.
What is a spot contract?
A spot contract is one of the quickest and easiest ways to exchange your currency. Whether you’re transferring a large one-off amount or a smaller regular payment, spot contracts allow you to make your international payments with minimal hassle and maximum satisfaction.As the name suggests, a spot contract is a method of making a purchase or a sale ‘on the spot’ – by choosing a spot contract, you’ll be agreeing to purchase or sell your foreign currency in the spot market at the current exchange rate for immediately delivery, rather than anticipating a required trade at a date in the future. The amount of money you are purchasing or selling, the date of exchange, and the date of receipt for the funds are all agreed and confirmed as soon as you decide to go ahead with the transaction.
There are almost 100 currencies that are regularly traded as part of the global economy – and you can use spot contracts to send payments advantageously in every single one of them.
How does it work?
Regardless of the method you choose to send money abroad, when you register with Hermex you’ll be appointed a designated dealer with whom you’ll speak directly in order to action your foreign payments.
If you want to make a spot transaction, all you need to do is speak to your designated dealer and verbally agree the deal. They will then act on your behalf to send out a contract note detailing the deal, and supply all of the necessary details for the international payment to go ahead.
Once everything is agreed, you then send across your funds to settle the deal, and the money is sent to the beneficiary on the same working day.
A spot transaction in foreign currencies is typically transacted with a two day value date.
Is it right for me?
A spot transaction could be right for you and your business if:
- You need an easy to understand, “buy now, pay now” kind of transaction
- You want to know exactly what the net result of your currency conversion will be
- You want the resulting funds to be transferred immediately
Got a question about spot contracts? Our friendly, experienced dealers will be happy to help. Call us on 0207 856 2490 or email firstname.lastname@example.org for more information about any aspect of the overseas payment process.