Frequently Asked Questions

With over a decade of providing foreign exchange solutions to corporations globally, MTFX can help answer questions you need to you manage your risk and effectively manage your treasury functions.
What exactly is foreign exchange?

Foreign exchange is the settlement and arrangement of funds around the world, through the buying and selling of currencies. More than 1.6 trillion U.S. dollars are exchanged on a daily basis by banks and foreign exchange brokers. There are two types of exchange rates: Buy Rates - when a foreign exchange broker is buying foreign currency and Sell Rates - when a foreign exchange broker is selling foreign currency.
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How does MTFX compare to my bank?

Unlike most banks, MTFX takes a highly proactive approach to your foreign exchange requirements. We never take your business for granted and this is reflected by all of our team in the excellent service that they provide to our customers. Our exclusive focus on foreign exchange means that you benefit from our highly specialized knowledge and expertise. We will constantly monitor the exchange rates that will affect you and work with you to define the best strategies for your needs.
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How can MTFX give exchange rates that are better than those offered at the bank?

MTFX specializes in FX portfolio management. The banks view foreign exchange as only one of hundreds of product offerings while at MTFX foreign exchange is all we do. We have numerous trading lines which allow us to obtain the best possible price in any currency.
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How do you make your money?

We make our revenues through the currency spread. To ensure that we remain competitive our spreads are significantly smaller than those of the banks or other currency brokers.
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Will I have to terminate my current banking relationship?

No, there is no need to terminate your banking relationships.
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Is there an advantage of buying or selling on a particular day?

No, the international currency market operates around the clock.
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Why is trading time critical?

Money markets can be very volatile, reacting rapidly to information from around the globe. At MTFX we provide you with both the information and the tools to reduce risk and maximize profits.
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How large or small are the transactions you handle?

We typically process foreign exchange requirements from five thousand dollars to millions. Our high volume trading position gives us the ability to provide all our customers, regardless of size, superior portfolio management solutions.
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How are currency values affected by interest rates?

Higher interest rates attract foreign investors searching for better returns. The resulting flow of money in and/or out of a country will affect its currency valuation.
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What causes currency value fluctuations?

The value of a currency may change based on any combination of many factors such as interest rates, the balance of payments, strength or weakness of the economy, political and psychological factors. A country's currency can also affect the strength or weakness of another currency.
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How can I be protected from fluctuations?

A Forward Contract enables you to reserve an amount of currency to meet a future foreign currency requirement, at an agreed rate for as far in advance as you choose, as a hedge against market fluctuations.
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What is a forward contract? What does it mean to hedge?

One term that is frequently used in the foreign exchange industry is the word "hedge". It refers to an action taken to protect the client from foreign currency fluctuations. The coverage is similar to an insurance policy, in that it guarantees the purchaser protection against adverse market conditions. The purchase of a forward contract is an agreement to buy or sell currencies for settlement up to a year in the future at predetermined exchange rates. This is used when a client wants to reduce currency fluctuation risk on accounts payable issues when dealing with foreign suppliers. Forward contracts require a percentage deposit to initiate the process.
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What currencies can a forward contract be purchased in?

Canadian Dollars, US Dollars, Great British Pounds, Euros and other currencies on an available basis.
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What is a fixed date forward contract?

This is an agreement between two parties to exchange one currency for another at a fixed rate for value and settlement on a specific date in the future
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What is an option-dated or flexible forward contract?

These are simply forward contracts that allow the client to exercise their requirement for currency on a choice of dates
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Can a Forward Contract be cancelled?

A Forward Contract is locked in and therefore cannot be cancelled.
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What is a spot transaction?

An agreement to buy or sell a currency at the current exchange rate is considered a spot transaction. A spot transaction is typically delivered and settled within two business days.
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Will MTFX prepare a draft or cheque payable to my suppliers?

MTFX will prepare USD cheques and drafts payable to any number of suppliers according to information provided by your company. Drafts and money orders for most international currencies can be prepared in a similar manner.
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What is the difference between a wire and a draft?

A foreign draft is a guaranteed cheque that is issued in a currency of the client's choice. Drafts come in all major currencies and are less expensive than sending a wire. The draft must be physically transferred and is often difficult to cash in politically unstable countries. A wire or EFT is an electronic transfer of funds. (see next question)
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What is a wire or telegraphic fund transfer?

Wires are the electronic transfer of funds from one bank to another. It is a quick and hassle free way to transfer funds. Benefits include: Wiring is faster than utilizing a courier to send a bank draft or money order. The funds are already collected which means the receiving bank will not put a hold on them. Wire transfers are much more secure than cash transactions
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How is a Telegraphic Wire Transfer Completed?

A telegraphic wire transfer is an electronic instruction for payment. MTFX’s International Wire Department forwards your instruction to our correspondent banks, which transfers the converted funds to the beneficiary's bank in the destination country, for deposit directly to the beneficiary's account.
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Can a wire be recalled?

No, once a wire is initiated it is guaranteed funds. However, if there is inconsistent or incorrect information on the wire, (i.e. beneficiary name or account numbers don't match) the process can be reversed but it is time consuming and might take up to a month..
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Can MTFX provide same-day courier service?

Yes, if you book a foreign currency deal before 11:00am. If you call later than 11:00am, we cannot guarantee same-day service but will make every effort to meet your service requirements.
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Why does MTFX certify my cheques?

All funds received by The Money Trader are certified upon pickup or shortly thereafter. Clients may request their funds in guaranteed (bank drafts) or non-guaranteed (MTFX cheques) form. If our clients choose to receive guaranteed funds from MTFX, they must be prepared to provide payment in guaranteed funds.
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