THE A - Z OF CURRENCY HEDGING

The glossary with insights and facts that makes currency hedging terms and concepts easily understandable.

A

At the money

at the money

At the money

At the money is a term used in options trading. Options are contracts that allow you to buy or sell an asset at a pre-agreed price.

 

 

B

Base currency

base currency

Base currency

The base currency is the first currency shown in a foreign exchange quotation. The second currency in the quotation is called the quote currency, or counter currency.

C

Collar

Collar - FX Glossary

Collar

A collar is a hedging strategy that helps you manage your foreign exchange risk by limiting your exposure to currency fluctuations to within a certain range.

D

Derivative

derivative

Derivative

A derivative is a type of financial contract that gets its value from an underlying asset. In foreign exchange transactions, the underlying asset is typically a currency’s exchange rate.

E

Exposure

exposure

Exposure

In foreign exchange transactions, exposure is the risk that you could lose money due to the exchange rate evolving in a way that is unfavourable to you.

F

Stay tuned!

'F' will be published on June 18, 2021.

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