How to lock in an exchange rate for your money transfer with hedging options

Save on your international money transfer or forex trade with a temporary, guaranteed rate.

Updated Mar 7, 2019

Fact checked

What does it mean to “hedge” your options?

The investment community uses “hedging” to describe protecting or lowering your risk of loss on a trade. There are a few tools you can use to hedge your risk in the foreign exchange and currency transfer market: forward contracts, limit orders and stop-loss orders.

Contract options

Forex transactions can be completed in two ways: by using a spot contract or using a forward contract.

Spot contracts

A spot contract is just that — a rate that a bank or money transfer service quotes on the spot at the moment of your exchange. If you’re sending a one-off transfer, you’re using a spot contract. The rate you’re offered is often a margin above the interbank or mid-market rate, marked up a bit so the provider can pocket the difference. You’ll typically get a better spot contract with an independent money transfer service than you will with a bank.

Forward contracts

Unlike a spot contract, a forward contract allows you to lock in a favourable exchange rate for future purchases, protecting you against unexpected fluctuations in exchange rates. Ideal for businesses or those making recurring transfers, these agreements usually guarantee you a rate from 30 days to up to two years. They typically require a deposit with the balance due once the contract is executed.

A guide to forward contracts

What is the mid-market rate?

table
The mid-market rate is what your money’s actually worth on the global market compared to another currency. It’s the midpoint between worldwide supply and demand for that currency — and the rate banks and transfer services use when they trade among themselves. Use this rate as a baseline to compare against the rates provided by your bank or transfer service. With it, you’ll discover which companies offer the best rates.

Order options

Exchange rates constantly fluctuate, and most foreign exchange providers offer order services that smooth out the predictability of these fluctuations. Order options are best for those who have a good handle on predictions and know when it’s a good time to buy.

Limit orders

With a limit order, you specify your ideal exchange rate. When the market reaches that rate, it’s locked in and you’re contacted to authorise the completion of your transfer.

A guide to limit orders

Stop-loss orders

A stop-loss order is nearly the opposite of a limit order: instead of specifying an ideal rate, you indicate a rate you want to avoid dropping below. If the market falls to that rate, your currency is purchased automatically, giving you the potential to profit when the market rises again. Many people use limit orders and stop-loss orders together.

More information on stop-loss orders

Recurring payments

If you need to send regular transfers overseas — weekly, monthly or quarterly payments to the same recipient — many services will allow you to lock in even better rates with lower fees.

As with any money transfer transaction, be sure to compare your options so you can get the best rates and fees for your money.

How can I hedge with an online forex broker?

To begin hedging your forex trades, you’ll need to:

Determine your options. Learn whether your broker offers such hedging tools as forward contracts, limit orders and stop-loss orders or find one that does.
Assess your risk tolerance. No trade carries zero risk, so you’ll need to determine how much risk you’re willing to take.
Choose two currencies to trade. Consider pairing the “majors” — for example, dollars and pounds — against the euro.
Contact a forex broker. If you’re a new client or will make ongoing exchanges, ask if you’re eligible for any bonuses or perks. Then get to hedging your trades.

Compare international money transfers

Table: sorted by a combination of service offering and the amount your recipient will receive

Use our comparison calculator to assess transfer fees, exchange rates and other details for sending funds overseas with our money transfer affiliates.

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Min. Transfer Amount	Transfer Speed	Online Transfer Fee	Rate	Amount Received	Description	CTA	Details
GBP 1	2 days	GBP 20.00	1.125	EUR 5,601	TransferWise uses the mid-market rate and transparent fees to help you send money in 45+ currencies.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 1.00 Transfer methods Online Transfer options N/A Customer service Email Available currencies AED, ARS, AUD, BDT, BGN, BRL, BWP, CAD, CHF, CLP, CNY, COP, CRC, CZK, DKK, EGP, EUR, GBP, GEL, GHS, HKD, HRK, HUF, IDR, ILS, INR, JPY, KES, KRW, LKR, MAD, MXN, MYR, NGN, NOK, NPR, NZD, PEN, PHP, PKR, PLN, RON, RUB, SEK, SGD, THB, TRY, TZS, UAH, UGX, USD, UYU, VND, XOF, ZAR, ZMW Go to site Read the full review
GBP 1	2 days	-	-		TransferWise uses the mid-market rate and transparent fees to help you send money in 45+ currencies.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 1.00 Transfer methods Online Transfer options N/A Customer service Email Available currencies AED, ARS, AUD, BDT, BGN, BRL, BWP, CAD, CHF, CLP, CNY, COP, CRC, CZK, DKK, EGP, EUR, GBP, GEL, GHS, HKD, HRK, HUF, IDR, ILS, INR, JPY, KES, KRW, LKR, MAD, MXN, MYR, NGN, NOK, NPR, NZD, PEN, PHP, PKR, PLN, RON, RUB, SEK, SGD, THB, TRY, TZS, UAH, UGX, USD, UYU, VND, XOF, ZAR, ZMW Go to site Read the full review
GBP 2,000	1 day	GBP 0.00	1.113	EUR 5,567	TorFX sends money overseas in 30+ currencies, with competitive rates for transfer amounts over $2,000.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 2,000.00 Transfer methods Online, Phone Transfer options N/A Customer service Phone, Email Available currencies AED, AUD, CAD, CHF, CZK, DKK, EUR, GBP, HKD, HRK, HUF, ILS, JPY, NOK, NZD, PLN, SEK, SGD, THB, TRY, USD, ZAR Go to site Read the full review
GBP 10,000	Same day	N/A	N/A	N/A	Universal Partners FX offers competitive exchange rates and same-day transfers in 100+ currencies.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 10,000.00 Transfer methods Online, Phone, Bank Account to Bank Account Transfer options Regular payments, One off payments, Market orders, Forward contracts Customer service Phone, Email Available currencies AED, ALL, AMD, ANG, AOA, ARS, AUD, BBD, BDT, BGN, BHD, BMD, BND, BOB, BRL, BSD, BWP, CAD, CDF, CHF, CLP, CNY, CRC, CVE, CZK, DJF, DKK, DOP, DZD, EGP, ETB, EUR, FJD, GBP, GEL, GHS, GMD, GNF, GTQ, GYD, HKD, HNL, HRK, HUF, IDR, ILS, INR, JMD, JOD, JPY, KES, KRW, KWD, KYD, KZT, LKR, LRD, LSL, MAD, MDL, MGA, MRO, MUR, MWK, MXN, MYR, MZN, NAD, NGN, NIO, NOK, NPR, NZD, OMR, PEN, PHP, PKR, PLN, PYG, QAR, RON, RSD, RUB, RWF, SAR, SCR, SEK, SGD, SLL, SRD, STD, SZL, THB, TND, TRY, TTD, TWD, TZS, UAH, UGX, USD, UYU, XAF, XCD, XOF, XPF, ZAR Go to site Read the full review
GBP 1,000	Same day	GBP 0.00	1.113	EUR 5,567	SpartanFX has fee-free transfers, a best exchange rate guarantee and personalised one-to-one support for every customer.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 1,000.00 Transfer methods Online, Phone, Bank Account to Bank Account, International Money Order Transfer options Regular payments, One off payments, Market orders, Forward contracts Customer service Phone, Email Available currencies AED, AUD, BGN, CAD, CHF, DKK, EUR, GBP, HKD, HUF, ILS, JPY, NOK, NZD, SEK, SGD, USD Go to site Read the full review
GBP 2,000	1 day	GBP 0.00	1.113	EUR 5,567	CurrenciesDirect makes transferring money abroad simple with bank-beating exchange rates.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 2,000.00 Transfer methods Online, Phone Transfer options N/A Customer service Phone, Email Available currencies AED, AUD, CAD, CHF, CZK, DKK, EUR, GBP, HKD, HRK, HUF, ILS, JPY, NOK, NZD, PLN, SEK, SGD, THB, TRY, USD, ZAR Go to site Read the full review
GBP 5,000	1 day	GBP 0.00	1.118	EUR 5,592	CurrencyTransfer lets you shop around for the best exchange rate on its online marketplace.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 5,000.00 Transfer methods Online, Phone Transfer options N/A Customer service Phone, Email Available currencies AUD, BDT, BMD, CAD, CNY, DZD, EUR, GBP, HKD, ILS, INR, JMD, JPY, NZD, PHP, PLN, RUB, USD, ZAR Go to site Read the full review
GBP 2,500	Same day	GBP 0.00	1.113	EUR 5,567	CentralFX's dedicated team will guide you or your business from first call to final payment.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 2,500.00 Transfer methods Online, Phone, Bank Account to Bank Account Transfer options Regular payments, One off payments, Market orders, Forward contracts Customer service Phone, Chat, Email, Branch Available currencies AED, AUD, BBD, BGN, BHD, BRL, BWP, CAD, CHF, CNY, CZK, DKK, EUR, GBP, GHS, GMD, HKD, HNL, HRK, HUF, IDR, ILS, JOD, JPY, KES, KWD, KYD, LSL, MAD, MUR, MXN, NOK, NZD, OMR, QAR, RON, RSD, RUB, SAR, SEK, SGD, SZL, THB, TND, TRY, UGX, USD, ZAR, ZMW Go to site Read the full review
GBP 1	Same day	GBP 0.00	1.119	EUR 5,594	XE has fast transfers with no fees and a range of foreign currency tools.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 1.00 Transfer methods Online, Phone, Bank Account to Bank Account Transfer options Regular payments, One off payments, Market orders, Forward contracts Customer service Phone, Email, Branch Available currencies AED, AMD, AUD, BAM, BBD, BDT, BGN, BHD, BND, BRL, BWP, CAD, CHF, CLP, CNY, COP, CRC, CVE, CZK, DKK, DOP, EUR, FJD, GBP, GEL, GTQ, HKD, HNL, HRK, HUF, IDR, ILS, JMD, JOD, JPY, KES, KRW, KWD, KZT, LKR, LSL, MAD, MKD, MUR, MWK, MXN, MYR, NAD, NOK, NZD, OMR, PEN, PGK, PHP, PKR, PLN, PYG, QAR, RON, RSD, RUB, RWF, SAR, SBD, SCR, SEK, SGD, SZL, THB, TND, TOP, TRY, TTD, TWD, TZS, UGX, USD, VUV, WST, XCD, XPF, ZAR Go to site Read the full review
GBP 10	Within an hour	GBP 1.99	1.11	EUR 5,548	Special offers like free transfers and better exchange rates available for new customers. Remitly has quick, affordable transfers around the world, with both express and economy options.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 10.00 Transfer methods Online, Bank Account to Bank Account, Cash Transfer Transfer options N/A Customer service Phone, Chat, Email Available currencies ARS, BDT, BGN, BOB, BRL, CLP, CNY, COP, CRC, CZK, DOP, EGP, ETB, EUR, GBP, GHS, GTQ, GYD, HNL, HRK, HTG, HUF, IDR, INR, JMD, KES, KMF, KRW, LKR, MAD, MXN, MYR, NIO, NPR, PEN, PHP, PKR, PLN, PYG, RON, RWF, THB, TND, TRY, TZS, UGX, USD, UYU, VND, XAF, XOF, ZAR Go to site Read the full review
GBP 5	2 days	EUR 3.00	1.119	EUR 5,595	Special offer: Zero fees on your first 10 transfers. CurrencyFair has bank-beating exchange rates and fast transfer times on 15+ popular currencies.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 5.00 Transfer methods Online Transfer options N/A Customer service Phone, Email Available currencies AED, AUD, CAD, CHF, CZK, DKK, EUR, GBP, HKD, HUF, IDR, ILS, INR, NOK, NZD, PHP, PLN, SEK, SGD, THB, USD, ZAR Go to site Read the full review
GBP 10	Within an hour	GBP 2.00	1.119	EUR 5,591	First two transfers free for new customers. Azimo sends money directly to a bank account or over 280,000 cash pick-up points. It also has fast transfers to 50+ countries.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 10.00 Transfer methods Online, Phone, Agent, Cash Transfer Transfer options N/A Customer service Phone, Email, Branch Available currencies AED, ALL, AMD, AOA, ARS, AUD, AZN, BAM, BBD, BDT, BGN, BHD, BIF, BMD, BOB, BRL, BWP, CAD, CHF, CLP, CNY, COP, CRC, CVE, CZK, DKK, DOP, DZD, EGP, ETB, EUR, FJD, GBP, GEL, GHS, GMD, GNF, GTQ, HKD, HNL, HRK, HTG, HUF, IDR, ILS, INR, ISK, JMD, JOD, JPY, KES, KGS, KHR, KMF, KRW, KWD, LAK, LBP, LKR, MAD, MDL, MGA, MNT, MRO, MUR, MVR, MWK, MXN, MYR, MZN, NAD, NGN, NIO, NOK, NPR, NZD, OMR, PEN, PGK, PHP, PKR, PLN, PYG, QAR, RON, RSD, RUB, RWF, SAR, SBD, SCR, SEK, SGD, SLL, SZL, THB, TJS, TND, TOP, TRY, TTD, TWD, TZS, UAH, UGX, USD, UYU, VEF, VND, VUV, WST, XAF, XOF, XPF, ZAR, ZMW, ZWD, BYN Go to site Read the full review
GBP 50	Same day	GBP 2.99	1.113	EUR 5,564	Use promo code 3FREE to send your first 3 transfers with no fee. Conditions apply. WorldRemit sends money to 110+ countries for bank-to-bank deposits, cash pick-ups or mobile top-ups.	Go to site	Compare	Show details	Details Minimum transfer amount GBP 50.00 Transfer methods Online Transfer options N/A Customer service Chat, Email Available currencies AED, ALL, AMD, AOA, ARS, AUD, BAM, BBD, BDT, BGN, BHD, BIF, BOB, BRL, BWP, CAD, CHF, CLP, CNY, COP, CRC, CVE, CZK, DKK, DOP, EGP, ETB, EUR, FJD, GBP, GEL, GHS, GMD, GNF, GTQ, HKD, HNL, HRK, HTG, HUF, IDR, ILS, INR, ISK, JMD, JOD, JPY, KES, KGS, KHR, KMF, KRW, KWD, KYD, LAK, LBP, LKR, LRD, LSL, MAD, MDL, MGA, MRO, MUR, MVR, MWK, MXN, MYR, MZN, NAD, NGN, NIO, NOK, NPR, NZD, OMR, PEN, PHP, PKR, PLN, PYG, QAR, RON, RUB, RWF, SCR, SEK, SGD, SLL, SOS, SRD, THB, TJS, TND, TOP, TRY, TZS, UAH, UGX, USD, UYU, VND, WST, XAF, XCD, XOF, ZAR, ZMW, BYN Go to site Read the full review

Compare up to 4 providers

Disclaimer: Exchange rates change often. Confirm the total cost with the provider before transferring money.

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Noi Rotstein

Noi Rotstein was a publishing innovation and data analysis manager at Finder. She crunched numbers, wrote pages and created striking visualisations.

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