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Receiving Foreign Funds

How a seafood distributor leveraged window forwards to optimize a CAD 264,000 contract

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Industry:Food & Beverage

Client:NYC-based seafood distributor

Region:United States

Exposure:264,000 CAD (~$203,000 USD)

Hedge Ratio:100%

264K CAD

Contract Value

~$203K

USD Equivalent

100%

Hedge Ratio

9 Months

Timeline

Background

A NYC-based seafood distributor contracted to supply Canadian chain restaurants. The contract value was 264,000 CAD (~$203,000 USD) with a 9-month payment timeline — 25% (66,000 CAD) within 4 months and 75% (198,000 CAD) within 10 months.

Products Used

Delayed Open Date Window Forwards

Challenge

Unfavorable exchange rates when purchasing seafood from overseas markets
Costs exceeding planned budget due to currency fluctuations
Long payment timeline creating extended currency exposure
Need to align hedging with staggered payment schedule

Strategy

66K CAD window forward: opening in 3 months, closing 5 months out
198K CAD window forward: opening in 9 months, closing 11 months out
Delayed open dates to leverage interest rate differentials
Aligned hedge maturities with expected payment schedule

Outcomes

Achieved better exchange rates through interest rate differential leverage
Generated profit versus converting at spot price
100% hedge ratio eliminating currency uncertainty
Payment schedule fully aligned with hedging strategy

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