Forward Contract Calculator
See what a forward contract actually costs you before you sign it.
Enter the amount, the mid-market rate and the rate a provider has quoted. The tool shows the margin in pounds, the deposit you tie up, and the swing a forward removes.
Say you owe a supplier $500,000 in six months. A provider quotes a forward rate that looks close to today’s. The gap between that rate and the mid-market rate is the provider’s margin, and on a payment this size it is rarely small.
Most quotes call the rate competitive. This calculator turns it into figures you can act on: what you pay to fix the rate, what you post as a deposit, and what you give up if sterling later moves your way.
It runs entirely on the numbers you type, so you can price any quote against the mid-market rate before you commit. Currency Expert compares providers and never holds your funds.
There is no charge to use Currency Expert. We may receive a fee from a provider if you become its customer.
Why the number in pounds is the one that matters
Price a forward quote in pounds
Manual entry, no live feed. Type the mid-market rate and the rate you have been offered, and the tool works the cost out instantly. Rates read as foreign currency per £1, so GBP/USD 1.2700 means $1.27 to the pound.
The numbers are illustrative and recompute from whatever you enter. They are not a live quote or advice on whether to hedge.
How to read these numbers
Five figures, in the order they matter when you are deciding whether a quote is fair.
The margin is the number to argue about
Start with the margin card. It is the difference between the sterling figure at the offered rate and the sterling figure at the mid-market rate, shown in pounds. That is what the provider earns on the deal, and it is the only figure you can negotiate.
A provider will often point at the transfer fee instead, because it is small and easy to waive. On a six-figure payment the fee is noise. If you take one thing from this tool, make it the habit of asking each provider for the margin over the mid-market rate, in pounds, and comparing that.
The deposit is cash flow, not cost
The deposit card shows what you post now. You do not lose it. It sits with the provider as security and is applied when you settle. But it leaves your account today, so treat it as a working-capital question, not a price.
Where a deposit matters most is timing. If you are already tight on cash before a completion or a shipment, tying up 8% of a large contract for six months is a decision in itself. We would check that against your other commitments before booking.
The range is what you are actually buying
The range card is the case for the forward. It shows what the same payment could be worth if you left the rate open and the market moved. The width of that spread is the uncertainty you are removing.
Read it honestly. A forward removes the bad case and the good case together. If sterling moves in your favour, you do not get the benefit, because you fixed the rate. That is the trade you are making, and you should see the size of it before you agree.
The margin call is the part providers explain late
The last card is the one that catches businesses out. Once your forward is live, a move against your fixed position can trigger a call for more cash, even though nothing about your underlying deal has changed. The illustration shows the rough swing against your deposit.
Treat it as an order of magnitude, because each provider marks the position on its own terms and gives you a short window to fund it. The point of showing it is simple: before you sign, ask what triggers a call and how long you get to meet it.
What this tool assumes, and what it does not do
So you know where the figures are solid and where they are a guide.
It assumes you enter two honest rates: the live mid-market rate for your pair, and the all-in forward rate the provider has quoted for your settlement date. If you enter the mid-market rate in both fields, the margin will read as nil, which is the tool telling you it has no offered rate to compare.
There is no live rate feed in this version. You type the rates in yourself, which keeps the tool working even when a market data source is not. You can pull the mid-market rate from any reputable source at the moment you are comparing quotes.
The margin-call figure is an illustration, not a provider quote. It approximates the mark-to-market swing on a given move and compares it against your deposit. A real contract is valued on the provider’s own method, so use this to prompt the right question, not to predict a specific call.
This is general information, not advice on whether to hedge or which provider to use. Whether fixing the rate is the right call depends on your margins, your cash flow and how firm your date is. If you want that judgement applied to your own exposure, that is what the comparison desk is for.
Two worked examples, the same as the presets
Illustrative rates, not live quotes. Load either into the calculator with the buttons above and change the figures to fit your own deal.
Importer, buying
At the offered rate of 1.2550, the $500,000 bill costs you £398,406 to fix. At the mid-market rate of 1.2700 it would cost £393,701, so the provider’s margin on this deal is about £4,705, roughly 1.2% of the mid-market value.
You post an 8% deposit now, about £31,872, held until settlement. It is cash tied up, not a fee you lose.
Leave the rate open instead and the picture is wider. If sterling weakens 5%, the same bill costs about £414,422; if it strengthens 5%, about £374,953. The forward removes roughly £39,000 of that swing, and with it any chance of the cheaper outcome. That is the certainty you are paying for.
Exporter, selling
Selling €750,000 at the offered 1.1820 locks in £634,518. At the mid-market 1.1700 you would receive £641,026, so the margin here is about £6,508, roughly 1.0% of the mid-market value.
On the sell side the provider takes its margin by giving you a slightly worse rate, so the proceeds come in a little lower. Your deposit at 5% is about £31,726, posted now and returned into the settlement.
For an exporter, a stronger pound is the bad case. If sterling strengthens 4%, the receipt is worth about £616,370; if it weakens 4%, about £667,735. Locking £634,518 protects you from the fall and gives up the rise.
If your margin cannot absorb a £25,000 shortfall, we would treat that protection as worth more than the last fraction of a per cent on the rate.
Where to go once the numbers make sense
This tool prices a quote. These guides tell you whether to take it.
If you are still deciding whether to hedge at all, start with our currency hedging guide. It works the choice both ways and covers the tools beyond a plain forward, so you are not fixing a rate just because you can.
If you have settled on a forward and want the mechanics, our currency forward contracts guide sets out how the rate is priced, the deliverable and non-deliverable versions, and where to arrange one.
When your date is not firm, read fixed versus flexible forwards before you commit to a single settlement day. We would not lock one date until you are sure of it.
If a term on your quote is unfamiliar, the currency hedging glossary defines each one by what it costs you rather than by textbook theory. Between them, those pages answer the question this calculator cannot: not what the quote costs, but whether you should accept it.
Before you act on a number
A figure on this page is a prompt, not a contract.
Currency Expert is a comparison and introduction service. We do not execute transfers or hold client funds. The calculator gives you a way to test a quote, so that when you speak to a provider you already know what to ask and what a fair margin looks like.
A forward reduces uncertainty, but it also removes any benefit from a favourable rate move and can require further cash through a margin call. Provider terms, protections and fees vary. Check the regulated entity and how it safeguards your deposit and proceeds before you proceed.
Common questions
Is the deposit a fee? +
No. The deposit is cash the provider holds as security against the contract until you settle, and it is applied to the deal at settlement rather than kept.
You do not lose it, but it leaves your account when you book, so treat it as a working-capital question. The fee, if any, is a separate and usually much smaller charge.
Why is the forward rate different from today’s rate? +
Because of the interest-rate gap between the two currencies, not a forecast. The currency with the lower money-market rate trades at a forward premium and the higher-rate one at a discount.
That difference is the forward points, which is carry, not a bet on direction. The provider’s own margin then sits on top of the carry-adjusted rate, and the margin is the part you pay.
Can the contract still bind if my deal falls through? +
Yes. A forward is a binding contract with the provider, separate from your underlying deal. If the supplier order or completion collapses, you still owe the contract.
You can usually roll it to a later date or close it out, but if the market has moved against you, closing out costs money, taken from your deposit and invoiced if it runs over. Ask about close-out terms before you sign, not after.
What triggers a margin call? +
A move in the market against your fixed position while the contract is live. If the mark-to-market swing runs beyond your initial deposit, the provider can call for more cash to top it up, often within a business day or two.
Nothing about your own deal needs to change for this to happen. The illustration here shows the rough size of the swing against your deposit, but each provider marks the position on its own terms.
Does this calculator use a live exchange rate? +
No. You enter the mid-market spot and the offered forward rate yourself, which keeps the tool working without depending on a data feed.
Pull the mid-market rate from a reputable source when you are comparing quotes, then type in each provider’s offered rate to see the margin in pounds. When you want live quotes compared for you, we do that against the same mid-market reference.
Compare live forward quotes for your exposure.
Tell us the currency, the amount, the date, and whether that date is firm. We will compare live forward quotes from specialist providers against the same mid-market forward reference, and be straight about the trade-offs. No cost, no obligation.
For how we compare a provider’s rate and fee against the live mid-market, see how we compare providers.