Vanilla Option

Overview

A Vanilla Option provides the purchaser with the right to buy or sell a specified amount of foreign exchange at a given rate in the future. You are under no obligation to deal at this chosen rate and may walk away from the deal at maturity. This allows you to freely transact in the spot market if the rate has moved in your favour.

A Vanilla Option, therefore, combines the protection provided by a forward foreign exchange contract with the flexibility of transacting in the spot market. An upfront premium is payable for this flexibility.

Requesting a product sheet will help you understand:

> How it works

> Advantages and disadvantages you need to consider

> Example scenarios

Investec has always been supportive of our business. We have worked with a number of their teams – including their FX and commodities specialists – and have always been very happy with their level of service.

Jeanine Wilkinson - Group Treasury Manager, Flybe - January 2014

There are alternatives.

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