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Expert Solutions for FX Risk Management

Option contracts are a risk management tool used to obtain protection against adverse movements in currency exchange rates. They involve an agreement between you and us to exchange one currency for another up to a pre-agreed date.

Authorised and regulated by the Financial Conduct Authority.

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Caxton experts can provide guidance to manage your currency exposure

Structured Option Contracts

For those customers already familiar with the benefits and risks associated with Structured Option contracts, protecting your currency from adverse volatility can be highly rewarding at a time where uncertainty continues. Caxton provide a number of popular Options contracts that meets the needs of most corporate hedging requirements.

Forward Contracts

Lock in a rate up to 18 months in advance.

Advantages of Forward Contracts
No upfront cost
Certainty of rate achieved
Fixed or Flexible Settlement

Disadvantages of Forward Contracts
Obligation to trade
Collateral requirement

Vanilla Option

Protect against unfavourable market movements and have the freedom to convert at a better rate. There is a non-refundable upfront cost for a Vanilla Option.

Advantages of Vanilla Options
Participate in favourable exchange movements
Unlimited upside
Full downside protection
No ongoing obligations

Disadvantages of Vanilla Options
Upfront cost

Participator Option

Protection against unfavourable movements and proportionate participation in favourable moves with no upfront cost.

Advantages of Participator Options
Benefit from favourable exchange movements at the Collar Percentage
Unlimited upside
Full downside protection
No upfront cost

Disadvantages of Participator Options
Potential obligation to trade a proportion of the contract
Collateral requirement

Collar Option

Set a Protection Rate and participate in favourable movements up to a Best Case Limit. The Protection Rate and Best Case Limit can be tailored to match specific needs.

Advantages of Collar Options
Benefit from favourable market moves up to a Best Case Limit
Fully protected against unfavourable market moves
No upfront cost

Disadvantages of Collar Options
Obligation to trade
Collateral requirement

Bespoke Structured Option Contracts

For those customers that are qualified or professionally regulated and find existing Structured Option products unsuitable for their specific requirement, Caxton can offer customised Options upon request.

Benefits
Tailored to your requirements
Clarity during price comparison with other providers
Consistency in risk management hedging procedures

Cons
You cannot exercise the option until the agreed expiry date
There may be a cost to cancel a structured Option
Options are not subject to cooling off periods

Options Desk

Telephone: +44 0207 201 0560
Email: Rehan.Ansari@caxtonfx.com


A free 30 minute Option Contracts consultation

To schedule a currency protection consultation with our Head of Options call +44 0207 201 0560