Chapter 01 · Section 1.1
Swiss Importer - 4
Situation: June 4, you make an offsetting transaction, selling DM 500,000 for July 15 delivery forward at a rate of 0.83
What is the result?
a) You are free of any obligation with your bank.
b) You are free of any obligation and the bank credits your account.
c) You are free of any obligation and the bank debits your account.
You bought at 0.85 and sold at 0.83 - you lost money. You lost 500,000 x 0.02 sfr = 10,000 sfr.