Keith Moon

I have a question for the MD of OZforex but rather than pm you, its best to share?

Rounded figures for convienience ok.

£100,000.00 in sterling, i want to change it to the Australian dollar using the OZforex system of exchange. Now this money is sitting in a building society account, a normal mutual say for example the Yorkshire Building Society.

The building society will allow me to make a CHAPS transfer to any account for a payment of £30.00, this is instant.

1) Do i have to CHAPS it to my current account, i.e. the Nationwide Flex account, then CHAPS it again to the OZforex account, or can i CHAPS it straight to the OZforex account. I ask because maybe a building society may be a little reluctant to CHAPS a large amount of money to another account which is not in your own name, as the OZforex account is in the OZforex name.

The exchange rate is good at the moment, but i do not intend to leave until around twelve months time.

2) How long can you take the rate until you have to exchange the full amount?

3) How much deposit do you have to put down to hold or tie into the deal?


I ask because this is my assumption, correct me if i am wrong?

Monday morning the rate is great, i call up, say i want to take a 12 month forward contract on £100,000.00 at a rate of say £1 to $2.7. So i agree the deal, and also agree to BACS the £10,000.00 deposit to the OZforex account, which arrives in the OZforex account after the three day transfer time for a BACS payment?

So in 12 months time i CHAPS the remainder of 90,000.00 to the OZforex account, and OZforex tranfer $270,000.00 to my account in Australia?


Cheers for reading.

theotherphil

You may get a better response if you ask at ozforex:

Contact Us

This is a large forum and your post may be lost in the sea of other posts. You can always post the official reply and let us know.

comet555

Perhaps you should send him with a private message with a link to the thread. Then maybe he'll know that you're looking for an answer to something

It is the weekend in Oz, perhaps he's not working.

Here is the link for Matt Gilmour, he's the one who usually answers these questions.
http://britishexpats.com/forum/member.php?u=47157

Pollyana

Indeed. Matt is very quick to answer but doesn't often have time to browse, so its always best to make him aware of what is going on.

carlap

Not sure why you think Ozforex will be able to tell you if your BS will or won't accept transfers of any kind. All they care about is that the agreed sum is in their bank account within the agreed time. Bacs is fine which can take 3 days. In fact with cahoot they specify up to 4 business days.

I got a call from Ozforex 3 days after a cahoot transfer, checking I had paid the money. I did the deal after 4pm, so cahoot send it next day, plus it was a weekend, so 2 extra days. I said I had paid and they said fine. It arrived in their account maybe 2 days later. I think it took about 7 days in total.

One thing to consider, Nationwide require you to go into a branch to do a chaps transfer. If you are in Oz when you transfer your final payment, just make sure you can do it remotely with your bank.

Also, chaps is not instant, they try to get it to arrive same day, but often state you have to transfer by, say, 12 noon. It should be there at worse by the next day. So again consider this if the maturity date is on a Friday !

savanna454

We have Nationwide Flex & Nationwide International Accounts

We have never had to go into a branch - bit difficult as we've been in OZ for 2.5 years!

CHAPS transfers need to be predesignated but we've setup these by phone followed by faxed instructions.

mgilmour

Hi Keith,

Thanks for the post I will respond point by point for ease of reading.

1) If the Building sociey will CHAPS it direct then that will be faster but, as you note, sometimes they are reluctant to do that. It's worth trying first though. Otherwise your plan B will work. Everyones banking setup is slightly differnt and we understand that, we have had people sending us payments in lots of GBP 1,000 because that's their daily limit whilst others can do in one go.

2) You can book a foward 12 months in advance.

3) This is very important information for anyone considering a forward contract, especially in volatile markets. We normally accept 5% deposits but I think next week we are increasing this to 10% in line with other brokers due to market volatility. Importantly we need additional deposits if you lock in a rate and the market moves against you (ie GBP/AUD higher) by more than the deposit. Eg sometime who locked in at 2.10 would now be in a 23% unrealised loss position. The 5% we had from them initially would be insufficient so we would have asked for the other 18% along the way. This keeps our business protected against people walking away from contracts.

Your assumption and example is entirely correct but worth noting again that you may have to give us further deposits along the way, and if they cant be provided for whatever reason we have to close the contract and recover any loss from the client which is not pleasent for anyone. The key point being additional deposits maybe required and clients need access to liquid funds to meet these requests if they occur.

Regards,
Matt Gilmour
Managing Director

mary1967

So it's only if the dollar rate gets higher than originally booked that you'd request a bigger deposit? I take it this is what's referred to as margin calling?

Last question Is it possible to extend the contract date or are you tied to the original date agreed?

mgilmour

That's correct, only if the rate moves against the forward contract, eg. if you sold GBP/AUD and it rallied further, that would see additional margin being called by a broker.

The contract date can be moved around, OzForex retains discretion of this because a customer might keep try and extending a contract rather than settle it, if it's in a loss position. Settling the contract early is always OK.

Regards
Matt Gilmour
Managing Director

mary1967

Thank you