What is a Participating Forward?

An FX product that allows you, as importers and exporters, to manage your currency risk and participate in favourable market movements. It's an agreement to set a protection rate for a specified currency amount for a future settlement date.

Understanding Participating Forwards

Watch this short video to learn how Participating Forwards work for importers and how they could help your business in managing your foreign currency risk.

Watch how Participating Forwards could help you manage FX risk | View transcript (DOCX, 20KB)

Benefits

  • Provides you with protection at a fixed, known protection rate.

  • Offers you potential gain from a favourable movement on the participating portion of the transaction amount.

  • There's no premium outlay.

Considerations

  • Your worst case fixed rate is less favourable than the equivalent forward rate.

  • Your gain potential is limited to the extent of the participating portion of the transaction amount.

  • You have an obligation to transact the fixed component at maturity and cancellation of the contract may incur a cost or benefit to you.

What else do I need to know?

Participating Forwards could be suitable if you're a business not wanting to pay a premium, but would like to enjoy protection and a degree of participation without the prospect of triggering an unfavourable rate.

Managing foreign exchange

Movements in foreign exchange rates can impact businesses differently, so it's important to have a strategy tailored to your specific needs.

Learn with NAB

Foreign Exchange with NAB

Read about managing your exposure to changes in the foreign currency market.

Forward Exchange Contracts

Understanding Foreign Exchange risk is important. Learn how Forward Exchange Contracts can be useful.

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Important information

The information provided in this webpage is intended to be of a general nature only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on any information that you read on this webpage, National Australia Bank Limited (ABN 12 004 044 937, AFSL and Australian Credit License 230686) (NAB) recommends that you consider whether it is appropriate for your objectives, financial situation and needs. NAB recommends that you seek independent advice and obtain and consider the relevant Product Disclosure Statement (available at Financial Markets or by calling 1800 307 827), before acting on any information on this webpage, including whether to acquire or to continue to hold a product or service mentioned.

The products on this webpage are issued by NAB.

Please consider our Financial Services Guide.

The Target Market Determination for this product is available at nab.com.au/TMD.

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