A comprehensive guide to hedging the FX risk

After attending this course you will be able to:

understand and identify the FX risk

detee the type of hedging to be implemented

understand and use different types of derivatives such as forwards, FX-Swaps and options

combine different instruments in order to build hedging strats

analyze the cash flow and find the real exposure

make the connection between hedging strats and financing facilities

understand the regulation requirements

You may find useful to have an office calculator, a pen and some white sheets of paper.

Become an expert in hedging the FX exposure ! Learn how to master the FX derivatives instruments !

There are a lot of risks related to a business, some of them are quite obvious, others are not.

A power break is an example of risk

A competitor entering the market with a substitute product is another type of risk

A big company coming to town may absorb a lot of working force causing the salaries to increase

The bankruptcy of a supplier could cause serious purchase problems

The bankruptcy of a big customer may endanger the company's profitability

What happens if any of these risks take place ? How much money can you lose ? Can you quantify ? Hardly, I would say... And even if you could calculate the losses, what instruments can you use in order to protect your business ?

The first good news about the FX risk is that it can be calculated exactly. For example, if you have an exposure of one million dollars and the FX rate moves adversely by 0.05, then you could lose 50,000. Precisely !

The other good news about the FX risk is that you have a lot of instruments to protect. So, why not learn how to do it ?

This course is designed especially for the professionals who work or would like to work in companies that deal with imports and/or exports. Because these activities generate cash flows in more than one currency, there is a obvious need to reduce the probability of losses generated by adverse changes in currency rates.

If you work in a bank or would like to work in a bank that offers hedging instruments, this course will help you understand clients' needs and increase the quality of the hedging strats offered by the bank.



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