TOD, TOM, SPOT, Forward, SWAP
- TOD: Allows applying for currency exchange upon the exchange rate of the date when the order is executed. All the transactions are executed at the same day.
- TOM: Allows you to sign a buy/sell contract a day before the date of execution, thus minimising the currency risk.
- SPOT: transaction is similar to TOM, however, the order will be executed on the third day after the Bank and the Client have signed the agreement.
Forward transactions are based on the same principle as TOMorrow and SPOT transactions: The agreement about currency conversion at a certain rate is signed at a time before the date of order execution. The difference is that forward transactions contracts are signed for a much longer terms - up to one year.
At the time of signing a forward transaction contract, the client makes a security deposit of 5% of the contract value in a bank account. After the transaction was executed, the client receives this deposit back. Any losses which may occur due to exchange rate fluctuations are covered with the deposit.
SWAP is a banking transaction that consists of two opposite conversion transactions over the same amount of money. In a SWAP transaction, the bank first buys a certain amount of currency from the client; then after a defined period of time, it sells it back to the client. Also in this transaction, the client beforehand knows both exchange rates.
The SWAP transaction has an important advantage: The client knows the exchange rates, and therefore, can avoid the market rates fluctuations. This service is popular among financial and trading companies. For example, the company with dollars on the account buys and sells goods using Euro. The SWAP transaction allows to define the price of goods no matter what the currency market will be.
ORDER deals envisage sale/purchase of currency at an agreed rate, which differs from the current market rate. When the market rate reaches the agreed rate, a deal is executed automatically (ORDER operates 24-h).
An order is set in the market only upon receipt of a Customer’s application (processed as the order) and provided that there are sufficient funds available on an account.
As soon as the Customer’s application is received, an amount specified in the order is locked on his/her account. When the order is set in the market, the Customer receives a notification that his/her order is accepted for execution and is activated. Once the order is executed, the Customer will be notified thereof.
Details of an ORDER deal include its term, price and amount of currency. The order can be withdrawn prior to execution during the bank’s business hours (from 9.00 am to 6.00 pm). Minimum deal amount – USD 100 000 (or equivalent in other currency). The order can be executed from 9.00 am until 6.00 am during working days.
There are two types of ORDER deals:
• take profit – to fix positive results when a currency pair reaches the forecasted rate;
• stop loss – to minimise possible losses of an open position in case of unfavourable currency rate.
List of currencies available for operations
Rietumu Banka exchange rates are updated several time a day and depend on situation on financial markets.
When exchanging over 5'000 euro you may negotiate a preferable rate with dealer.
There are no additional fees for currency exchange.