Pre-transaction risk comprises the firm’s operational and currency risk before a transaction is committed. From the operational point of view, pre-transaction risk starts with the process of collecting and monitoring the firm’s FX exposure. Is the process of collection exposure timely, relevant and accurate? Are currency markets monitored with manual or automated processes? In terms of currency risk, pre-transaction risk, also known as pricing risk, refers to possible exchange rate fluctuations between the moment a company prices a transaction and the moment it is formally agreed. It is especially prevalent in industries that operate with framework contracts like the specialty chemicals industry. Pricing risk, in this case, starts when FX-denominated inventory is purchased and continues until the corresponding sales transaction is agreed.