The Rate Board, Automatic Pricing and Revaluation

Two questions decide your profit: what rate am I trading at today, and what is the currency I am holding actually worth right now. The first is the rate board, the second is revaluation. This episode covers both, plus automatic pricing and the rate guard that catches a slipped digit before it becomes a document.

What you will learn

• How the buy rate, the sell rate and the spread work together
• How the currency list feeds the board, and why to switch off currencies you do not use
• How to set rates automatically from a live source with your own margin on top
• How the rate guard warns you about an out-of-range trade before it is posted
• What revaluation is and how to read unrealised gain and loss
• How often to run revaluation

Step by step

Read the rate board

Think of the rate board as the board on the wall of the shop. Each currency has a buy rate and a sell rate, and the gap between them is your spread. Everything else in the software reads from this board — so if the board is wrong, every price you quote today is wrong.

The buy rate is what you pay when you buy from a customer; the sell rate is what you charge when you sell. They are never the same number, and the difference between them is not an accident — it is your margin.

Tidy the currency list

The currencies themselves come from the currency list. Each one has its symbol, how many decimals it is shown with, and whether it is active. Turn off the currencies you do not work with — a shorter list means fewer wrong picks in the forms.

Update the board by hand

Updating the board is simply typing in the boxes. In the morning, when the market opens, you set the rates once here and every form in the software follows.

Switch on automatic pricing

Typing rates by hand every morning gets old fast. Press the settings button — this is automatic pricing. For each currency you say where its rate should come from, a live source, and Nexto keeps the board updated by itself. You stop being the person who has to remember.

You are not forced to take the source rate as it is. You add your own margin to it: a coefficient, or a fixed spread. So the source gives the market rate and you sell at your rate — automatically, and without editing anything each morning.

Set the rate guard

You set an acceptable range for each currency. If somebody records a trade at a rate outside that range — a slipped digit, a wrong direction — the software warns before the document is posted. Catching a mistake before it is booked is much cheaper than reversing it afterwards.

Understand the revaluation problem

You bought dollars at one rate and you are still holding them. The rate has moved. On paper your balance is unchanged, but in reality you are richer or poorer than yesterday. Revaluation is what puts that difference into the books.

Read the revaluation page

The page shows it plainly: for each currency, how much you are holding, at what average cost you got it, what today's rate is, and what the difference comes to. Green means unrealised gain, red means unrealised loss — and the word unrealised matters, because you have not sold yet.

Run the revaluation

When you want that difference in the accounts — at the end of the month, or before you take a profit figure seriously — you run the revaluation. A real accounting document is posted: each currency's difference on one side, the revaluation gain or loss account on the other. From that moment on, the profit and loss report is telling you the truth about what you hold, not just about what you sold.

Tips

• Set the board first thing in the morning, or better, let automatic pricing set it for you. Every quote you give today is read from it.
• Put a sensible range on the rate guard for each currency. It has saved more than one office from a bad day.
• Run revaluation at the end of every month, and any time you are about to make a real decision from the profit figure. Running it too often just fills the ledger with documents; never running it means a profit report that quietly lies to you.
• The in-app page help (the ? icon at the top of the page) has more detail.

FAQ

What is the difference between the buy rate and the sell rate?

The buy rate is what you pay when you buy a currency from a customer; the sell rate is what you charge when you sell it. The gap between them is your spread, and it is your margin — it is deliberate, not an accident.

If I use automatic pricing, am I stuck with the source's rate?

No. For each currency you choose a live source and then add your own margin on top, either as a coefficient or as a fixed spread. The source supplies the market rate and the board shows your rate.

What does unrealised gain or loss mean?

It is the difference between what a currency cost you on average and what it is worth at today's rate, on the amount you are still holding. It is unrealised because you have not sold yet — green on the page means gain, red means loss.

How often should I run revaluation?

There is no single answer, but a simple rule works: at the end of every month, and any time you are about to make a real decision based on the profit figure. See also where is my profit.