currency hedge question currency, question, expected, selling

svgleeson

This may be a stupid question….how exactly does “sell dollar futures” mean? When hedging by “selling dollar futures”, what is expected to happen?
Thanks for your help.

jim8z3

you sell dollar futures because you expect the dollar to decrease in value versus another currency?

Roflnadal

also, you are basically committing to deliver a foreign currency in the future and in return you will get USD, hence locking in a USD rate today for a future delivery. Ideally this will co-incide with your receipt of a foreign currency. Which is the reason you’d enter into an fx future in the first place (i.e. you are long the foreign currency).
Does this help?

TheMBAGlover

Suppose I live in Europe and have dollar investment. I want to hedge the currency risk, so I “sell dollar futures”, because that dollar investment will “give” dollars, which I want to get rid of because I want to have that value in my own currency. Is that the concept?
If that’s correct, then if I will make a purchase in dollar, then I need to “buy dollar futures”.
Can you verify this logic is correct? Thanks.

Spongebob

2-hr break it is. And it is much needed and justified for finally having some clue on this @#$% :-)
Thanks tibwa!