faqs

Questions about Trading

How quickly can I trade?

Your trading account can be activated within an hour of receipt of your completed documentation

How complicated is trading with CHFX?

Trading with CHFX is extremely simple. You can open an account online, assign a dedicated broker and trade either by phone or online. Our exceptional levels of service and groundbreaking technology enable you to complete efficient, hassle-free transactions.

What is a same-day transaction?

Same/next day. We also offer contract to be settled on the day of trade (same day value) and overnight (next day) settlement. CHFX must have received cleared funds between 12pm and 2pm depending on the required currency. Your payment will be sent automatically, the working day to your designated beneficiary. Please note some currencies may have longer settlement periods. This contract type is ideal for currency required on an urgent basis.

What is a spot transaction?

A spot transaction is an agreement to buy or sell a currency to be delivered and settled usually within two working days, as per the value or settlement date agreed. CHFX can provide settlement to clients of up to five working days to allow for BACS payments. Spot transactions are an ideal tool for businesses or private individuals that require delivery.

What is a forward contract?

A forward contract allows the buyer to lock in the rate for up to one year on a specified maturity date, effectively removing future risk from any movements in the foreign exchange market. As a risk management tool this contract provides protection against fluctuating exchange rates. Also known as hedging, this can be one of the most effective ways of managing your foreign exchange exposure. A forward contract is ideal for private individuals wishing to fix the cost of purchasing an overseas property or a business wishing to take advantage of the current market rate against future obligations. Forward contracts will usually require a deposit of between 5% and 10% deducted from the sum payable on the maturity date.

What is a forward time option contract?

It’s also known as fixed forward. This works in exactly the same way as a standard forward contract but allows the funds to be drawn down in full or as a partial amount prior to contract maturity. The option is available within a maximum of a three month time window. For example, if you purchased currency on 1st February for maturity on 1st June you could request a time option three months prior to this date on 1st March, allowing you to make unlimited draw downs between these two dates. This is ideal if you need a fixed exchange rate but are unsure of the date you require funds within the time window. CHFX also has the facility to roll the maturity date of a forward by executing a swap if required. This may involve additional cost.

Why is a margin required when buying currency on a Forward basis?

A margin is required by the CHFX as standard security against currency purchased on a forward basis. The bank holds on your behalf 10% of the total amount of any forward contract and the remaining 90% is paid upon on the maturity date of your contract. It is important to note that CHFX must maintain a 10% margin at all times against your trade to reflect any sudden market movement. CHFX may conduct a ‘margin call’ to maintain your deposit at 10%. Forward margin is also protects CHFX against defaults on forward contracts.

Can I leave an order for CHFX to execute if the market reaches a certain market level?

A limit order placed in the market will enable you to buy or sell a currency when the market reaches a particularly required level, higher than the current market price. We will then monitor the market and confirm your order is filled if the market reaches your specified level / target rate. You can place a time limit on the order or let the order run GTC (Good Tell Cancelled). A limit order can also be requested on an unconfirmed alert only basis (without commitment). This type of order is worked 24 hours a day on the international market.

Can CHFX help protect me if the rate moves against me?

A stop loss order placed in the market will enable you to buy or sell a currency set a lower level exchange rate than the current market rate. This protects you against negative movements in the exchange rate, and limits your loss. You can place a time limit on the order or let the order run GTC (Good Till Cancelled). A stop loss can also be requested on an unconfirmed, alert-only basis (without commitment). This type of order is worked 24 hours a day on the international market. Stop Orders that are activated are filled at the best possible rate, and are not guaranteed at the rate at which they are entered, there is therefore a risk that such orders may be executed on less advantageous terms.

How does it work for selling currencies?

CHFX on account opening, provide all clients automatic access to 23 multi currency accounts. This allows you to sell currencies, ideal for repatriation of export profits or an individual’s foreign wages. We can receive your foreign currency wire transfers on your behalf for no charge, allowing you to hold funds on account. Funds can then be converted into your chosen currency when the market is favorable or you require. Funds can be executed and payment made on a same day basis.

Is there a minimum or maximum trade size I execute?

Trades can range from £1000 upwards to your designating credit limit set by our client on boarding team.

Do rates vary according to volume of trade?

Yes, fixed costs for every trade are the same regardless of trade size. Therefore rates margins will be tighter the larger the trade.

What rate will I get?

The rate you receive will be based on the live market inter-bank price. This rate will include our margin depending on trade size and be quoted to you online or by phone. Please note live inter-bank rates change per second. Teletext and certain internet websites usually have a time delay.

What happens if my circumstances change?

On occasion, due to unforeseen circumstances, plans and requirements change. In the case where you have secured a forward contract but find you will no longer require to take delivery of the currency at the maturity date, you may sell the contract back to the market provided paying any losses and charges incurred.

Is it important I obtain a commercial rate?

Yes, very important; it is always beneficial to look beyond your bank and obtain exchange rates from an external supplier in order to make comparisons. You have nothing to lose by doing this.

Are there any hidden charges, costs or commissions?

No. There are no transfer fees, commision or any hidden costs

What sources of information does CHFX use?

Our experienced brokers use a wide range of sources to gather accurate, reliable and up-to-date information, used to inform our clients. These sources of information vary and include; CNN, CNBC, Reuters, Bloomberg, financial news websites, investment banks, independent market analysts and our own in house market experts. Our proactive approach through our online and phone broking, keep our clients up-to-date and in touch with exchange rate movements.

How can currency market volatility work for me?

The foreign exchange market is extremely volatile providing fluctuating rates per second. CHFX specializes in providing market information and up to date news vital in assisting you in deciding when to execute transactions. CHFX always uses the very latest technology to help manage your risk and maximize your opportunity. This allows you to benefit from currency fluctuations that move in your favor.

What affects currency exchange rates?

As a general rule fx markets move macroeconomic factors examining the behavior of the economy as a whole. Major movements in the exchange rate occur for three main reasons:

Interest Rates - Each currency has a central bank, and this central bank issues an overnight lending rate. This is a prime gauge of a currency’s value. Base Interest rates, are normally change by central banks on a monthly basis (if changed).

Unemployment Rate - The unemployment rate is a strong indicator of a country’s economic strength. When unemployment is low, this usually reflects a strong economy and currency.

Geopolitical Events - Like all markets, the currency market is affected by what is going on in the world. Key political events around the world can have a big impact on an economy and the value of its respective currency.

How can you minimize currency risk?

We have many tools available to to help you reduce your currency risk. The most commonly used contract is a Forward which allows you to lock in a currency rate today for a future date, whilst only paying initial margin (a deposit) to secure your rate. The balance of payment will be payable on your agreed future date. The reason for doing this is because no one knows where the currency rate will be in three or six months time, but by securing your currency rate early, you can lock in your costs with suppliers, and manage your exposure in a much more certain way.

Questions about CHFX

Why use CHFX

You can have more control of your money using our online trading platform or call our trading team who are just a phone call away. Take advantage of live currency rates as there is no need to fund your account in advance. You can buy your currency at bank beating rates and make FREE same day international payments! All client funds are safeguarded in segregated accounts.

Why do I have to open an account to use your services?

We are required under the Anti-Money Laundering Regulations set by the FSA and HM Revenue and Customs. We are obliged to carry out compliance procedures relating to all our clients.

How do I open an account?

It’s easy, Follow the simple steps to open a personal or corporate account. Even better, it’s free and there is no obligation to trade. Only use the account when and where you want to.

How long does it take to get my account set up?

As soon as we have received your documents and/or completed online forms our compliance and client on boarding team will carry out the necessary KYC checks (Know your customer). Your account can be opened and approved by email within an hour.

Why is it cheaper with you than with my bank?

It’s simple. We make money on the exchange rate spread, the difference between the buy and the sell rate. The only difference is that we change a smaller margin and profit than other brokers and banks. We also eliminate extra fees, charges and commissions. It is also important to highlight that, unlike major banks and financial institutions, we don’t have large overheads.

How is CHFX different from other brokers?

We have an online trading platform offering bank beating rates, as well as phone trading, FREE same day international payments and great customer service.

What is the difference between currency exchange and currency speculation?

We exchange currency. CHFX helps you manage the risk associated with exchanging one currency for another. We carry out the buying and selling of currencies on behalf of our clients in the most cost effective way.

Currency speculation, on the other hand is about day trading currencies for potential profit. The currency speculator is actually willing to take risk. As a client this is precisely the you want to avoid.

Am I covered by the Data Protection Act?

We take security of data very seriously indeed and are registered under the Data Protection Act to hold the minimum amount of data necessary to transact on your behalf. We do not provide any details to outside parties other than the details necessary to effect transactions.

Does it take longer to buy through a broker than a bank?

No. Generally as brokers are experienced working in the foreign exchange market they understand the importance of payments reaching their destination on time. Therefore as soon as funds reach a client account they are automatically sent by international transfer known as Swift. It can take as little as a few minutes to deliver funds to an account depending on the destination country.

Why would I want to use a broker when it is so conveinient to use my own bank?

Using CHFX creates simplicity and convenience by allowing you to outsource the task of facilitating payments or faxing currency orders. With CHFX you can buy by phone or even faster online. Our online system has no extra cost and you don’t even need to download any software. CHFX are specialists focused on one area, foreign exchange. This enables you to obtain information quicker and track your transactions with your dedicated broker from start to finish.

Payments and Settlements

How do I pay for the currency I've ordered?

There are three payment methods to settle a trade:

CHAPS - This is a same day transfer. Your bank may charge you to transfer money using this method.

BACS - This includes online payments and can take 3-4 days.

CHEQUE- This will take up to 10 days to clear on receipt.

CHFX DOES NOT ACCEPT CASH PAYMENTS UNDER ANY CIRCUMSTANCES

Please Note: Methods above are not applicable to all value/settlement dates.

How long do I have to make payment to CHFX for my trade?

Same day transaction - Payment required by 12pm on the working day.

Spot transactions - Standard is 2 workings days. CHFX provides flexibility of up to 5 working days if required and arranged when you book your transaction.

Forward and Forward Time options - 10% deposit is required within 2 working days. 90% required 24 hours before completion/maturity date.

Payments are always made as per agreed value or settlement date agreed with your broker or online. Please note late payment may incur extra costs.

What happens if I am unable to pay for my trade?

If you cannot make settlement for a transaction we will have to close out the contract by selling the related currency back to the market. Losses and charges incurred will then be covered by the client.

Do you charge for payments/wire transfers?

There are no payment or transfer fees and no hidden costs.

Once I have paid, how is the currency transferred?

Your funds are sent via Swift to anywhere in the world directly into the bank account of your instruction. This method is the quickest, safest and most effective way of transferring funds. We send CHAPS payment for sterling, domestic UK payments.

How long does it take CHFX to make payments?

CHFX make automatic payments on receipt of your funds and beneficiary bank details. You will receive an automatic payment confirmation by email. Most currencies can be credited to an account the same day but this depends on the currency and destination country.

What if I need my money before or after the forward transaction date?

Your foreign exchange contract will be booked with a value or settlement date. This is the date by which the transaction needs to be paid for. This is always agreed before you book a trade. If you should need your currency sooner than expected, we can ‘draw down’ the currency for early delivery. If you need funds after the value date, CHFX can ‘roll over’ or extend the value date. In both cases, your original exchange rate may be subject to adjustment and extra costs.

Do banks charge to receive funds?

Depending on the country and bank recipient fees may occur when funds arrive in the beneficiary account. These are also know as ‘agent fees’. CHFX will advise you on how to minimize these costs.

How are payments quicker and more efficient with CHFX?

All currency payments are sent by SWIFT transfer with most currencies being credited the same day we receive client funds, removing any time delays. For all UK domestic payments we send payments the same day via CHAPS. We always retain beneficiary bank details to avoid any need to email or fax details for every onward payment . As a much smaller company than a High St bank communication if far easy with CHFX.

Can a wire be recalled?

No, once a wire is initiated, payment is guaranteed by the bank. However, if there is inconsistent or incorrect information for the client’s onward payment, the transaction may be reversed or be delayed in crediting an account.

Do you pay interest on outstanding balances?

CHFX is not an interest bearing bank. Unfortunately we are not authorized to pay clients interest on balances held on account.

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