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Insights, updates and learnings
11/05/15
Know your position: FX Volatility, friend or foe?
The FX market is no stranger to volatility. Whether it is global economic or political uncertainties, or a country’s interest rate outlook, they all play out in the currency markets. The constant push and pull of both known and unknown information can lead to bouts of extreme volatility. FX traders...
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08/04/15
Using Hedgebook to make smart fx hedging decisions
Has anyone told you lately that they know where the currency is going? Lots of people think they know if it is going up or down but the reality is that no one knows where it is going in the next 5 minutes, 5 days or 5 years. We might...
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05/03/13
Hedging, and a deeper look into the types of Financial Hedges
Financial hedging involves buying and selling foreign exchange instruments that are dealt by banks and foreign exchange brokers. There are three common types of instruments used: forward contracts, currency options, and currency swaps.
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26/02/13
The Benefits of Hedging, and Managing FX Risk: Part 2
Managing this FX risk faced by importers and exporters all over the globe today is a three-step process: identify FX risk; develop a strategy; and utilized the proper instruments/strategies to hedge the risk.
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18/02/13
The Benefits of Hedging, and Managing FX Risk: Part 1
Many small- and medium-sized firms engaging in import and/or export activity tend not to hedge. The reasons not to hedge come in all shapes and sizes: it’s too complex; it’s too costly; there’s a misconception that it is speculation; or even that that firms don’t know about hedging tools and strategies available to them.
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11/02/13
Explaining Different Types of Exposure Risk
Importers and exporters alike face foreign exchange risk, or currency risk, when engaging in economic activity outside of their domestic currency. As explained in an earlier blog post, currency risk materializes for exporters when exchange rate volatility results in the company repatriating fewer revenues abroad, when the domestic currency strengthens relative to the foreign currency. For importers, this risk is the exact opposite: currency risk materializes when the domestic currency weakens relative to the foreign currency.
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04/12/12
Hedging Basics: A Currency Pair Risk Reversal
Learn about one of the most interesting strategies used by investors or treasurers to hedge their exposures to the currency markets: risk reversal.
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29/11/12
Hedging Basics: FX Hedging Using a Currency Put
Learn about one of the easiest and most effective ways to hedge a currency position, by purchasing a protective currency put.
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The Future of Interest Rate Swaps: Will Regulation Kill this Investment Vehicle?
12/10/12
The Future of Interest Rate Swaps: Will Regulation Kill this Investment Vehicle?
This is part 9 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In part 8, we discussed the role of interest rate swaps in the demise of Greece. Given the importance of swaps in the U.S. housing crash, new regulation has arisen that could threaten the future of this important financial derivative.
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05/10/12
Real World Example: Swaps Between Companies
In part 6 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy we provide a real world example of how swaps are constructed and executed.
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20/09/12
The differences between Currency Swaps and Interest Rate Swaps
This is part 2 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In part 1, we discussed the beginnings of swaps. In part 2, we’ll explore the differences between the two major types of swaps and their different uses for financial institutions.
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