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.作者: jim8z3 时间: 2013-4-10 23:09
you sell dollar futures because you expect the dollar to decrease in value versus another currency?作者: Roflnadal 时间: 2013-4-10 23:09
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?作者: TheMBAGlover 时间: 2013-4-10 23:10
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.作者: Spongebob 时间: 2013-4-10 23:10
2-hr break it is. And it is much needed and justified for finally having some clue on this @#$% :-)
Thanks tibwa!
