De activating the CASH Settlements for FX deals.

[former_member612153]

Hi

Can any one please let us knwo how can i de activate the cahs settlements option for FX deals.

Regards

karunakar

[former_member612153]

Thanks Ravi

[former_member612153]

Hi Ravi.!

Thanks for your inputs ..!! your contribution to this group is much appriciated..!!

Can i ask you like what does cash settlement in Forex deals mean..!!

noramaly we buy once currency and will sell another currency and are visible in flows tab

but did not quite under stand as what does Cash settlement means in Forex settlements..!!

Regards,

karunkar.

[Former Member]

Hi Karunakar,

The contract, here is the forex deal. Suppose the deal is for purchase of 100 USD/INR at a strike price of 50. It means you buy 100 USD and sell 5000 INR on the day of delivery. When this money in both currencies are transferred then it is physical delivery.

Instead, on the day of delivery, the exchange rate for USD/INR is 52. Your contract is for 50. Hence you gain 2 INR for every USD. Hence your total gain is 200 INR. If the gain amount alone is transferred i.e. only 200 INR is transferred to you from the counter party, it is cash deal. Only the gain/loss is transferred and the actual physical delivery does not take place.

Generally cash settlement is what happens in most of the cases.

Regards,

Ravi

Edited by: Ravishankar Ramamurthy on Sep 2, 2009 10:20 AM

[Former Member]

Hi,

In IMG -- TRTM -- Transaction Manager -- Foreign Exchange -- Transaction Management -- Define Product types.

Here specify the type of settlement as physical.

And have a screen variant for your settlement transaction and remove the cash settlement option.

Regards,

Ravi

Edited by: Ravishankar Ramamurthy on Aug 27, 2009 6:15 AM