Against the dollar, a decline in exporters gained from RS because they are paid in dollars, with damage to importers is because they had to excise $ $ buy expensive market. the risk of the currency market losses. is reduced through hedging it. Let us know what hedging bala.
What is a hedging:
Hedging is a way we can understand, like insurance that try to reduce any negative impact. hedging less prone to risk. but if the hedging correctly is of course less any negative impact of the situation.
How hedging:
Normally you understand that hedging in the futures market that you put into an attacking, which is exactly the opposite of the spot market you any fluctuations in the currency market can reduce the impact of.
What are hedging methods:
In the currency market three ways hedging. the first way forward contract. in this manner has been fixed in advance on the business exchange rate pre-defined in the contract (s). in this manner you took both their advantages and disadvantages on already. the second way currency futures. in this manner any time of two particular currency and fixed rate currency exchange among themselves. The third option is a kind of insurance the way it could say that currency market in your favor and help you to protect your security in the opposite.
Hedging strategy:
Exporter sell future currency of contract. example an exporter supply of one million dollars. money market fluctuations to avoid the risk of futures market it sells for $ reverse if someone pay a million dollars of goods to the importer, buying dollars in the forward markets can reduce the risk of foreign exchange call option the importer. purchase price first Reduce your risk from the way. vice versa exporter selling of foreign currency through colour option price risk by deciding in advance.
What is a hedging:
Hedging is a way we can understand, like insurance that try to reduce any negative impact. hedging less prone to risk. but if the hedging correctly is of course less any negative impact of the situation.
How hedging:
Normally you understand that hedging in the futures market that you put into an attacking, which is exactly the opposite of the spot market you any fluctuations in the currency market can reduce the impact of.
What are hedging methods:
In the currency market three ways hedging. the first way forward contract. in this manner has been fixed in advance on the business exchange rate pre-defined in the contract (s). in this manner you took both their advantages and disadvantages on already. the second way currency futures. in this manner any time of two particular currency and fixed rate currency exchange among themselves. The third option is a kind of insurance the way it could say that currency market in your favor and help you to protect your security in the opposite.
Hedging strategy:
Exporter sell future currency of contract. example an exporter supply of one million dollars. money market fluctuations to avoid the risk of futures market it sells for $ reverse if someone pay a million dollars of goods to the importer, buying dollars in the forward markets can reduce the risk of foreign exchange call option the importer. purchase price first Reduce your risk from the way. vice versa exporter selling of foreign currency through colour option price risk by deciding in advance.