currency hedging amount

Are my foreign cash flows big enough to start hedging?

By

Seth Phillips | CEO | Bound

One of the most common questions we get here at Bound is “At what volume of foreign currency flow does it make sense to start hedging?” 

Obviously that isn’t a question we can answer for another firm. A company needs to answer that for itself. 

What I can offer as a quick TL;DR is this: our smallest customers generally start thinking about using hedging to make foreign cash flows more stable and predictable when they start to have foreign revenue or foreign costs greater than $100,000/month. Most of our customers do much more than that, but that’s when we start to see questions start to come up. 

For Bound, we’re a USD-funded company and report our financials in USD. We earn revenue in all sorts of currencies and our operating costs are primarily in GBP and EUR. We’ve used our own product from day 1. 

Now, that’s not a fair comparison for most other companies since this is all we do everyday. Also, it’s common for companies to reach out to us after a shocking currency event that skewed their finances. So this makes us keenly aware of what can go wrong when companies just YOLO their currency risk and then get surprised when they get surprised. ;)

But, here are some discussion points that we talk to customers about when this question comes. 

  • There seems to be a trend in tech right now that is rewarding stability and predictability. We’ve moved on from the “growth at all costs” of 2020 and 2021. Investors and finance teams that we talk to today want to have predictable projections and they want to hit those numbers. How important are stable and predictable foreign cash flows to your overall projections? 

    • Could a 10% loss in foreign revenue have a material impact overall?

    • Could a 10% rise in foreign costs have a material impact overall?


  • I use 10% as a placeholder here. You might want to consider the volatility of the currencies you deal with. Currency volatility has been on the rise over the past few years and so that means this has become a bigger issue for companies - especially those that are completely unprotected. 

  • Think about proportions. 

    • Is this a million-dollar problem? If you have significant foreign cash flows and fluctuations can cause millions in unpredictable fluctuations, then think about proportional investment to solve the problem. How much would you spend to help other areas of the business be more predictable? This doesn’t mean you need to spend a lot of time, but is the potential value enough to spend proactive time on? 

    • Is this a hundred-thousand dollar problem? If your currency risk is in the 6 figure range, then think about how much time you’d want your team to spend on a problem that size? None? 10-minutes per month? There are programs you can set up that are automated and will be directionally correct without needing to spend much time. 

Ultimately, currency hedging used to be a lot of work, but we’re trying to make it easier for you. 

If you’ve got a lot of foreign currencies flowing through your business and aren’t doing anything to manage your exchange rate risk, then reach out and we’ll help you understand how much risk you have. 


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  • Hedge and optimise conversions in minutes

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F¥£K FX
  • Hedge and optimise conversions in minutes

  • Amend transactions in seconds

  • Know that you're getting fair prices

F¥£K FX
  • Hedge and optimise conversions in minutes

  • Amend transactions in seconds

  • Know that you're getting fair prices

Currency hedging for tech companies

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Copyright @ 2024 Bound


All testimonials, reviews, opinions or case studies presented on our website may not be indicative of all customers. Results may vary and customers agree to proceed at their own risk.


Bound (Bound Rates Limited) is a limited company registered in England & Wales under number 13036275 with registered offices at 16 Great Chapel Street, London W1F 8FL


Bound Rates Limited (FRN 966723) is authorised and regulated by the Financial Conduct Authority to act as an Investment Firm.​


For clients based in the European Economic Area, payment services are provided by CurrencyCloud B.V.. Registered in the Netherlands No. 72186178. Registered Office: Nieuwezijds Voorburgwal 296 - 298, Mindspace Nieuwezijds Office 001 Amsterdam. CurrencyCloud B.V. is authorised by the DNB under the Wet op het financieel toezicht to carry out the business of an electronic-money institution (Relation Number: R142701).


For clients based in the United States, payment services for are provided by The Currency Cloud Inc. which operates in partnership with Community Federal Savings Bank (CFSB) to facilitate payments in all 50 states in the US. CFSB is registered with the Federal Deposit Insurance Corporation (FDIC Certificate# 57129). The Currency Cloud Inc is registered with FinCEN and authorised in 39 states to transmit money (MSB Registration Number: 31000206794359). Registered Office: 104 5th Avenue, 20th Floor, New York , NY 10011.


For clients based in the United Kingdom and rest of the world, payment services (Non MIFID related products) are provided by The Currency Cloud Limited. Registered in England and Wales No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199).

Currency hedging for tech companies

Don't miss the latest

Copyright @ 2024 Bound


All testimonials, reviews, opinions or case studies presented on our website may not be indicative of all customers. Results may vary and customers agree to proceed at their own risk.


Bound (Bound Rates Limited) is a limited company registered in England & Wales under number 13036275 with registered offices at 16 Great Chapel Street, London W1F 8FL


Bound Rates Limited (FRN 966723) is authorised and regulated by the Financial Conduct Authority to act as an Investment Firm.​


For clients based in the European Economic Area, payment services are provided by CurrencyCloud B.V.. Registered in the Netherlands No. 72186178. Registered Office: Nieuwezijds Voorburgwal 296 - 298, Mindspace Nieuwezijds Office 001 Amsterdam. CurrencyCloud B.V. is authorised by the DNB under the Wet op het financieel toezicht to carry out the business of an electronic-money institution (Relation Number: R142701).


For clients based in the United States, payment services for are provided by The Currency Cloud Inc. which operates in partnership with Community Federal Savings Bank (CFSB) to facilitate payments in all 50 states in the US. CFSB is registered with the Federal Deposit Insurance Corporation (FDIC Certificate# 57129). The Currency Cloud Inc is registered with FinCEN and authorised in 39 states to transmit money (MSB Registration Number: 31000206794359). Registered Office: 104 5th Avenue, 20th Floor, New York , NY 10011.


For clients based in the United Kingdom and rest of the world, payment services (Non MIFID related products) are provided by The Currency Cloud Limited. Registered in England and Wales No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199).

Currency hedging for tech companies

Don't miss the latest

Copyright @ 2024 Bound


All testimonials, reviews, opinions or case studies presented on our website may not be indicative of all customers. Results may vary and customers agree to proceed at their own risk.


Bound (Bound Rates Limited) is a limited company registered in England & Wales under number 13036275 with registered offices at 16 Great Chapel Street, London W1F 8FL


Bound Rates Limited (FRN 966723) is authorised and regulated by the Financial Conduct Authority to act as an Investment Firm.​


For clients based in the European Economic Area, payment services are provided by CurrencyCloud B.V.. Registered in the Netherlands No. 72186178. Registered Office: Nieuwezijds Voorburgwal 296 - 298, Mindspace Nieuwezijds Office 001 Amsterdam. CurrencyCloud B.V. is authorised by the DNB under the Wet op het financieel toezicht to carry out the business of an electronic-money institution (Relation Number: R142701).


For clients based in the United States, payment services for are provided by The Currency Cloud Inc. which operates in partnership with Community Federal Savings Bank (CFSB) to facilitate payments in all 50 states in the US. CFSB is registered with the Federal Deposit Insurance Corporation (FDIC Certificate# 57129). The Currency Cloud Inc is registered with FinCEN and authorised in 39 states to transmit money (MSB Registration Number: 31000206794359). Registered Office: 104 5th Avenue, 20th Floor, New York , NY 10011.


For clients based in the United Kingdom and rest of the world, payment services (Non MIFID related products) are provided by The Currency Cloud Limited. Registered in England and Wales No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199).