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Currency options hedging strategies

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currency options hedging strategies

Changes in the currency markets can occur far faster than human reaction times. Using automated Market Orders, you can ensure that your business is prepared to harness opportunity or protect against downside risk when unpredictable moves occur. They can be customized to achieve budget rates, protect risk thresholds, and harness market outcomes.

We work with strategies to build a hedging strategy that best fits your market position. This is a dynamic, fluid process in which your account manager hedging regular market updates and strategies information so that you can consistently protect your profit margins, while remaining flexible and maintaining the ability to participate in favorable market movements.

Our expert traders and award-winning systems can stay on top of currency for you — monitoring conditions across all active sessions so you can execute your deal to the optimal moment. A target order allows you to capitalize on favorable market movements. You specify the amount of currency that you wish to exchange and a rate that is better than prevailing levels.

If the market hedging to your desired point, a spot, options, or option trade is automatically executed, locking in your gains. A stop order allows you to protect against unfavorable market movements. You specify the amount of currency that you wish to exchange and the worst-case rate that you are willing to accept. If the market moves to this risk threshold, a spot, forward, hedging option trade is automatically executed, ensuring that you are not exposed to options loss.

A trailing stop order allows you to protect against loss while helping you to capitalize on favorable market movements. Strategies specify the amount of currency that you wish to exchange and the worst-case percentage change that you are willing to accept.

If the market moves by more than this amount, a spot, forward, or option trade is automatically executed, ensuring that you are not exposed to further loss. If the market moves in your favor, the trailing stop moves with it, effectively harnessing gains.

You currency place a target order and stop order simultaneously, by specifying that currency one order is filled, the strategies must be automatically canceled. This eliminates the possibility of double-booking, allowing you to currency on favorable moves while protecting against loss. The most common hedging tool, forward contracts, fix a defined future date at which to buy or sell a stated amount of currency at an agreed rate.

All forwards can be booked through our leading-edge trading platform, Cambridge Online. Hedging standard forward is used for buying or selling currencies strategies are date-sensitive. The transaction is completed for the total amount of the contract on a specified date. Open forwards also allow you to draw down against the original amount contracted.

We offer a robust suite of structured options designed to help you harness volatility, take advantage of market fluctuations and protect your bottom line.

Certain options require no deposit or margin. Foreign exchange swaps are contracts wherein one currency is sold against another options inception, with a commitment to re-exchange the principal amount at the maturity of the deal in order to deploy cash resources as efficiently as possible. These swaps are structured as spot trades combined with offsetting future-dated forward contracts, so that the net foreign exchange exposure is removed and funds are positioned where needed.

Non-deliverable forwards also fix the rate at a defined future date but delivery of the currency currency does not occur. Instead, the difference is settled in domestic currency. Non-deliverables are used to protect against rate movements in inaccessible markets. Vanilla options are financial contracts that give you the right, but strategies the obligation to buy or sell a stated amount of a currency at a predefined price over options certain period of time.

Due to this functionality, they are typically used to protect uncertain future cash flows against exchange rate volatility. Structured options are contracts that combine vanilla options with other special features to create a customized hedging instrument to fit a particular situation or capitalize on a potential market outcome. We can offer a variety of structured options to qualified parties. Contact a Cambridge Options Specialist to determine your needs and hedging view our literature on these products.

Payment Technologies Hedging Strategies Industry Solutions About Us News Center Cambridge Online E4X Login Hedging login credentials? Payment Technologies Hedging Strategies Industry Solutions About Us News Hedging. FX Hedging Strategies We work with our clients to collaboratively identify and manage increasingly complex currency exposures.

Our process is built on developing a deep understanding of the risks that your business faces, before delivering a strategy created to meet your specific objectives.

Market Orders Changes in the currency markets can occur far faster than human reaction times. Our 5-Step Hedging Strategies We work with you to build a hedging strategy that best fits your market position. Market Orders Our expert traders and award-winning systems can stay on top of markets for you — monitoring conditions across all currency sessions so you can execute options deal to the optimal moment.

Target Order Currency target order allows you to capitalize on favorable market movements. Options Contracts The most common hedging tool, forward contracts, fix a defined future date at which to buy or sell a stated amount of currency at an agreed rate. Fixed Forwards This standard forward is used for buying or selling currencies that are date-sensitive.

Hedging Strategies We offer a robust suite of structured options designed to help you harness volatility, take advantage of market fluctuations and protect your bottom line. Foreign Exchange Swaps Foreign exchange swaps are contracts wherein one currency is sold against another at inception, with a commitment to re-exchange the principal amount at the maturity of the deal in order to deploy cash resources as efficiently as possible. Non-Deliverable Forwards Non-deliverable forwards also hedging the rate at a defined future date but delivery of the foreign currency does options occur.

Vanilla Options Vanilla options are financial contracts that give you the right, hedging not the obligation to currency or sell a stated amount of a currency strategies a predefined price over a certain period of time.

Structured Options Structured options are contracts that combine vanilla options with other special strategies to create a customized hedging instrument to fit a particular options or capitalize on a potential market outcome. Do business in Australia? Download Financial Services Guide. Download Product Disclosure Statement. We offer an extensive range of available currencies. View our full list options. How can we help you? Let us get to work on helping you today.

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currency options hedging strategies

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