FX hedging scenario simulator
What if the rate moves before you settle?
Use this FX hedging calculator to compare unhedged, single-forward, partial and layered GBP outcomes for a future payment or receipt, across moves of -10% to +10%, using rates you enter.
Open the simulator- Seven strategies, one chart, every number computed.
- Manual assumptions only. No live rates, no forecasts.
- Hypothetical scenarios, not a quote or financial advice.
Simulator
Model your hedging scenario
All fields start blank. Results update as you type.
Positive means more EUR per GBP.
Your scenario will appear here
Enter an amount and three rates, or load the clearly fictional worked example to see how it works.
Keep a copy of this scenario
Your scenario summary is not automatically attached. Paste the copied text into your enquiry, or keep the PDF to share with your account manager.
Method
How the simulator calculates
Direct quotation. Each rate is the quote currency per 1 unit of the base. With GBP as base, GBP value is the foreign amount divided by the rate; with GBP as quote, it is multiplied.
Cross pairs. For EUR/USD the amount crosses into the other currency at the selected-pair rate, then into GBP at a fixed bridge rate you enter. The bridge is unhedged and constant, so only selected-pair risk is shown.
Scenarios. The scenario rate is the reference rate times (1 + movement). Unhedged converts everything at that rate; 100% forward converts everything at the forward; 50% splits the two.
Layered stages. Four equal tranches, each at its own forward rate. A 50% layer uses tranches one and two; the rest settles at the scenario rate. GBP cash values are summed, never rates averaged. Without tranche rates, layered rows are shown as unavailable.
Margin. Gross profit moves by the business budget effect. Exporter sales also move by the GBP receipt difference; other costs stay fixed.
Excluded. Fees, funding costs, collateral, margin calls and termination costs.
Importer paying EUR 500,000 in 6 months. GBP/EUR reference 1.17, budget 1.15, forward 1.165, tranches 1.172 / 1.168 / 1.165 / 1.161. Budget gross profit £120,000 on £900,000 sales. The GBP/EUR quote falls 5% to 1.1115: one pound buys fewer euros.
- Budget cost
- £434,782.61
- Completely unhedged
- £449,842.56+£0.00 vs unhedged
- 100% single forward
- £429,184.55+£20,658.01 vs unhedged
- 50% single forward / 50% exposed
- £439,513.55+£10,329.00 vs unhedged
- Layered 25% coverage
- £444,037.21+£5,805.35 vs unhedged
- Layered 50% coverage
- £438,597.12+£11,245.44 vs unhedged
- Layered 75% coverage
- £433,432.61+£16,409.94 vs unhedged
- Layered 100% coverage
- £428,637.78+£21,204.77 vs unhedged
Here a weaker pound makes euros dearer, so cover helps. Had the pound strengthened, the same cover would forgo the gain.
Questions about the simulator
Why can a forward rate differ from today's spot rate?
Forward pricing depends on the currency pair, settlement term, relevant interest-rate differentials, market liquidity and basis, and the provider's pricing and commercial terms. It is not necessarily today's spot rate. Enter an independently obtained indicative forward rate or an explicitly hypothetical assumption; this calculator does not price a contract.
Does a forward contract guarantee a saving?
No. It can provide certainty over the covered selected-pair amount, but a favourable market move may make the unhedged outcome better. The forward quotation, fees and other contract costs also matter. With EUR/USD, the separate unhedged GBP bridge remains exposed.
Do these scenarios predict future exchange rates?
No. The movements are user-selected hypothetical stresses, not forecasts or probability estimates. Past performance and hypothetical scenarios do not predict future exchange rates.
Where do the rates come from?
From you. The reference, budget, forward, bridge and tranche rates are manual assumptions. Nothing is fetched from a live feed, and the settlement date does not derive a forward price.
How are rates quoted?
Every rate uses the direct quotation of the selected pair: quote currency per 1 unit of base currency. For GBP/EUR 1.17, one pound buys 1.17 euros, so the GBP value of a euro amount is the amount divided by the rate. For EUR/GBP the euro amount is multiplied by the rate.
How does EUR/USD work for a UK business?
The settlement amount is converted across EUR/USD into the other currency, then into GBP at a GBP bridge rate you enter. That bridge is held constant and is not hedged. A 100% EUR/USD hedge therefore does not fully lock your GBP outcome.
How are layered hedges calculated?
The amount is split into four equal tranches. Each covered tranche is converted at its own forward rate and the uncovered remainder at the scenario rate, and the GBP cash values are summed. Rates are never averaged, because averaging inverse quotations gives the wrong answer.
What is the difference between cushioning and net versus unhedged?
Cushioning and foregone upside measure only the share of movement from the reference rate that the cover absorbs or gives up. Net versus unhedged also includes the difference between the forward rate and the reference rate.
What costs are excluded?
Fees, spreads beyond your entered rates, funding costs, collateral, margin calls, early close-out and termination costs. Other business costs are held fixed.
Is my scenario sent to Ocean Capital Exchange?
No. Calculations run in your browser. The enquiry link opens the existing hosted form and does not attach your summary; you can paste a copied summary into it yourself.