Hedging in the Forex Market: Definition and Strategies
- Forex Trading
- 23 de maio de 2022
Because the scheduled transaction would be to sell euro and buy U.S. dollars, the investment bank would buy a put option to sell euro. By buying the put option the company would be locking in an ‘at-worst’ rate for its upcoming transaction, which would be the strike price. As in the Japanese company example, if the currency is above the …
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