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Automatic Creation of Forex (FX) Requirements
When Agiblocks detects a currency risk related to the settlement currency or position currency difference, it will create an FX requirement automatically on the contract Risk tab. However, automatically created FX requirements are meant to make things easier, but not take away oversight or the ability to make adjustments:
| • | Trading users should still check them |
| • | Trading users can still change them, e.g. adjust the rate or amounts or maturity date |
| • | Trading users can also delete them; as soon as you do this, Agiblocks will stop automatically creating FX requirements for this delivery, assuming you prefer to do it manually for this case. |
How this works
The first FX requirement will be created automatically.
| • | When you save the contract such that: |
| o | The settlement or position currency differs from the price currency |
| o | The price in pricing currency is known |
| o | The trading user did not yet create the FX requirement themselves |
| • | It uses the full amount in price currency as the from-amount |
| o | For settlement risk, you sell this for a purchase, or buy it for a sale |
| o | For position risk you buy this for a purchase, or sell it for a sale |
| • | It uses the latest rate from market data and calculates the to-amount in the other currency |
| • | The maturity date is based on the delivery period and payment terms: |
| • | The middle date + number of days specified by the payment terms |
Additional FX requirements are created for subsequent changes to the settlement currency/position currency:
| • | For the from-amount it will then use the to-amount of the last FX requirement |
Treasury users of the Forex allocation screen can still decide for any FX requirement, to hedge it differently (e.g. at a different rate), or not to hedge it at all.
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