officejax currency trading information

Channel



Ad your free banner at www.AdViews.info

 

Why Hedge Foreign Currency Risk?


International commerce has rapidly increased as the internet has provided a new and more transparent marketplace for individuals and entities alike to conduct international business and trading activities. Significant changes in the international economic and political landscape have led to uncertainty regarding the direction of foreign exchange rates. This uncertainty leads to volatility and the need for an effective vehicle to hedge foreign exchange rate risk and/or interest rate changes while, at the same time, effectively ensuring a future financial position.

Each entity and/or individual that has exposure to foreign exchange rate risk will have specific foreign exchange hedging needs and this website can not possibly cover every existing foreign exchange hedging situation. Therefore, we will cover the more common reasons that a foreign exchange hedge is placed and show you how to properly hedge foreign exchange rate risk.

Foreign Exchange Rate Risk Exposure - Foreign exchange rate risk exposure is common to virtually all who conduct international business and/or trading. Buying and/or selling of goods or services denominated in foreign currencies can immediately expose you to foreign exchange rate risk. If a firm price is quoted ahead of time for a contract using a foreign exchange rate that is deemed appropriate at the time the quote is given, the foreign exchange rate quote may not necessarily be appropriate at the time of the actual agreement or performance of the contract. Placing a foreign exchange hedge can help to manage this foreign exchange rate risk.

Interest Rate Risk Exposure - Interest rate exposure refers to the interest rate differential between the two countries' currencies in a foreign exchange contract. The interest rate differential is also roughly equal to the "carry" cost paid to hedge a forward or futures contract. As a side note, arbitragers are investors that take advantage when interest rate differentials between the foreign exchange spot rate and either the forward or futures contract are either to high or too low. In simplest terms, an arbitrager may sell when the carry cost he or she can collect is at a premium to the actual carry cost of the contract sold. Conversely, an arbitrager may buy when the carry cost he or she may pay is less than the actual carry cost of the contract bought. Either way, the arbitrager is looking to profit from a small price discrepancy due to interest rate differentials.

Foreign Investment / Stock Exposure - Foreign investing is considered by many investors as a way to either diversify an investment portfolio or seek a larger return on investment(s) in an economy believed to be growing at a faster pace than investment(s) in the respective domestic economy. Investing in foreign stocks automatically exposes the investor to foreign exchange rate risk and speculative risk. For example, an investor buys a particular amount of foreign currency (in exchange for domestic currency) in order to purchase shares of a foreign stock. The investor is now automatically exposed to two separate risks. First, the stock price may go either up or down and the investor is exposed to the speculative stock price risk. Second, the investor is exposed to foreign exchange rate risk because the foreign exchange rate may either appreciate or depreciate from the time the investor first purchased the foreign stock and the time the investor decides to exit the position and repatriates the currency (exchanges the foreign currency back to domestic currency). Therefore, even if a speculative profit is achieved because the foreign stock price rose, the investor could actually net lose money if devaluation of the foreign currency occurred while the investor was holding the foreign stock (and the devaluation amount was greater than the speculative profit). Placing a foreign exchange hedge can help to manage this foreign exchange rate risk.

Hedging Speculative Positions - Foreign currency traders utilize foreign exchange hedging to protect open positions against adverse moves in foreign exchange rates, and placing a foreign exchange hedge can help to manage foreign exchange rate risk. Speculative positions can be hedged via a number of foreign exchange hedging vehicles that can be used either alone or in combination to create entirely new foreign exchange hedging strategies.

John Nobile - Senior Account Executive
CFOS/FX - Online Forex Spot and Options Brokerage


TODAYS NEWS BY OFFICEJAX FREE ADVERTISING AND AD EXCHANGE SOLUTIONSMORE RESOURCES updated Fri. October / 20 / 2017


CNBC

Strategist predicts bitcoin, digital currency trading volume will 'soon ...
CNBC
Trading among digital currencies is exploding, according to Jens Nordvig, founder and CEO of Exante Data.

and more »


Spare RPi? You Have a Currency Trading Platform
Hackaday
This particular project by [dmitry] trades currency on the Forex exchange using an already-existing currency trading software package called MetaTrader. This isn't an ARM-compatible software suite though, so some auxiliary programs (Wine and ExaGear ...



South African Broadcasting Corporation

Zimbabwe gazettes a new law criminalising unlicensed currency trading
South African Broadcasting Corporation
Zimbabwean authorities have gazetted a new law criminalising unlicensed currency trading in an attempt to stem out a thriving parallel market for foreign banknotes in the country. The new law means those dealing illegally in foreign currency face up to ...



Business Standard

RBI proposes currency trading platform for retail customers ...
Business Standard
The Reserve Bank of India (RBI) on Thursday proposed retail customers' access to the currency trading platform, and that prices should be in line with the ...

and more »


Bloomberg

Ex-HSBC Trader Fights Extradition as Boss's U.S. Trial Nears End ...
Bloomberg
Stuart Scott, HSBC Holdings Plc's one-time head of currency trading in London, starts his fight this week against extradition to the U.S., as the trial of his ex-boss ...

and more »


This is Money

HSBC fined £175m over insider information being used in its currency trading business
This is Money
HSBC has been fined £130million for 'unsafe and unsound' practices in its currency trading business. The penalty was issued because the bank failed to stop traders using inside information from clients. It comes as former HSBC trader Mark Johnson, who ...

and more »


The Market Oracle

The Market Oracle
The Market Oracle
MetaTrader 4 is a dealing system developed by MetaQuotes Software for dealing on the internet in the currency trading, agreement for variations (CFDs) and futures trading marketplaces. MT4 Hrvatska as it is commonly known, obtainable at no charge ...

and more »


Newsient (blog)

RBI's new currency trading platform policy for retail customers
Newsient (blog)
Reserve Bank of India's proposal on the retail customers' access currency trading platform policy has grabbed a lot of attention. According to the policy, the prices of the inter-bank market should be in line which will be through an in-built mechanism ...



The Market Oracle

What is Backtesting? And Why You Need Backtesting System?
The Market Oracle
If you be familiar with Currency trading backtesting or always considered how to do it, then this information is for you. Just like everything in dealing, and in life, there is no one-size-fits-all. Backtesting will not work for every investor or every ...



CoinTelegraph

Wall Street Can No Longer Dismiss Bitcoin, Demand is Too High
CoinTelegraph
“Goldman's effort involves both its currency-trading division and the bank's strategic investment group, the people said. That suggests the firm believes Bitcoin's future is more as a payment method rather than a store of value, like gold,” wrote Vigna.

and more »

Google News

     Large inventory of office cubicle and partitions walls for sale in Northeast Ohio

     Find home remodeling contractors Akron Ohio

Search for estate sales in Akron Ohio

Click here to
OfficeJax free ad space available here improve pagerank with a free one way backlink

 

Find used office equipment in Ohio at www.OfficeJax.Has.It

www.Akron.Has.It

Find the best fleamarkets at www.FleaMarketWorld.Has.It

Find electric powered vehicles at www.NoGas.Drives.It

Flea Market World

Free Automatic Link Exchange

Akron City directory

Find homes for rent
in Akron Ohio
www.homes4rent.has.it

Anonymous and Confidential U.S. Mail Drops - No ID Required reship worldwide

Click here to
post your free classified ad here free advertising and one way backlink
Free one way backlink

 

officejax surplus office furniture outlet Akron, ohio

[Back to Top]

 

auction news and listings for Akron, Ohio

Akron crafts and hobby news center

Akron Ohio pet news

Advertising and promotions Akron, Ohio

The Akron blogging news center

Akron Ohio web site design news

best tips and home remedies

Akron Mortgaging and refinancing

Akron currency trading

Page Ranking Icon

 

Home | Site Map
© 2012 All Rights Reserved

 


currency trading forex currency trading online currency trading foreign currency trading currency forex learn online trading currency forex online trading currency day trading currency trading system forex currency trading system currency privateforextrader.com trading currency exchange trading e currency trading currency foreign privateforextrader.com trading book on currency trading currency trading broker currency trading software day trading forex currency currency ireland trading online currency trading system currency future trading day trading for the currency market online foreign currency trading fx currency trading forex currency trading beginner forex training course currency trading currency day system trading currency trading course 4x currency trading currency trading tutorial currency trading information foreign currency exchange trading currency global in market trading started in currency trading commodity  currency trading trading the global currency market international currency trading course in currency trading automated currency system trading foreign currency trading software currency trading strategy currency forex learn trading currency make money trading currency trading signal currency option trading currency forex market trading currency trading made easy chart currency trading currency trading  tip currency foreign forex trading currency demo trading currency trading forex spot rate learn currency trading basics currency trading currency trading for beginner forex currency trading broker currency electronic trading currency game trading currency exchange foreign  forex trading interbank currency trading practice currency trading currency forex fx software software software trading free trading currency guide tool online currency forex trading currency news trading best currency system trading currency trading account currency currency forex forex learn online online trading online currency trading strategy currency trading platform currency forex learn online online trading trading currency trading training company currency exchange foreign trading company currency forex trading currency euro trading currency forex trader trading automated currency trading currency foreign system trading currency market trading currency option trading system currency trading seminar business currency currency home internet trading trading canada currency trading spot currency trading currency exchange rate trading currency forex pair trading using vantagepoint currency network neural trading boards currency forex trading how to start currency trading currency trading australia currency forex tag trading currency forex trade trading currency insurance trading currency trading education live currency trading online currency option trading advisor currency expert trading, commodity currency future trading currency day foreign trading currency exchange link trading credit currency trading