TD Commercial Banking
Skip to content | Home |  Search  |  Contact Us
Login to: 
 
     Business Banking       Customer Service       Products & Services   
   Overview      Deposits & Investments      Cash Management      International      Financing      Specialty  

Find a Relationship Manager near you
  

Foreign Currency Services


Option-Dated Forward Contract

What is an Option-Dated Forward Contract?

An Option-Dated Forward Contract is similar to a regular Forward Contract in all respects except that the owner of the contract can settle it at any time within a pre-set 30-day period. The total amount of the contract can be settled in increments within that period until the entire amount is delivered. Option-Dated Contracts are available in all commonly traded currencies.

What are the benefits?

An Option-Dated Forward Contract lets your company eliminate downside risk by setting a price today for a foreign exchange transaction at a future date.

This gives you all the advantages of regular Forward Contracts, plus the added flexibility of consolidating a number of small forward requirements into one larger contract which can be more convenient and cost-effective.

An example

Suppose that on January 2, your company believes it will have to buy the following U.S. Dollar amounts in the month of February:

February 1 $300,000 US
February 10 $250,000 US
February 28 $450,000 US
-----------------
Total $1,000,000 US

If you’re sure of the dates on which you will require each amount, you can enter into a single Forward Option Contract which allows you to fix the price for U.S. Dollars on January 2 and then take delivery of the U.S. Dollars on the days you have specified.

Click Here to launch the
Foreign Exchange Calculator



For more information, contact a Relationship Manager at the Commercial Banking Centre nearest you.

Rates & Numbers


Tools & Resources


Direct Link to


TD Bank Financial Group