标题: Proxy and Cross hedge [打印本页] 作者: brain_wash_your 时间: 2011-7-11 18:59 标题: Proxy and Cross hedge
I don't know why I'm having trouble, but I'm very clear on proxy hedge, but can someone tell me the HOW currency cross hedging is different from proxy hedge?
See if my logic is correct, proxy hedge: you are a local investor (USD) investing in GBP denominated bond, and you proxy hedge USD to EUR.
In a cross hedge, your long GBP bond exposure is directly hedged with a EUR (GBP-EUR)? Does this mean that you still have EUR exposure and have to somehow bring EUR back to USD?作者: Analti_Calte 时间: 2011-7-11 18:59
I remember L2 had some bid-ask stuff on fx transactions. Maybe if you include bid-ask on 2 different contracts if would be very inefficient compared to a single direct hedge作者: Chuckrox 时间: 2011-7-11 18:59
janakisri Wrote:
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> I remember L2 had some bid-ask stuff on fx
> transactions. Maybe if you include bid-ask on 2
> different contracts if would be very inefficient
> compared to a single direct hedge
Right, but the cross hedge will give the manager the exposure that they want. While a proxy hedge will only approximate the currency they are looking to hedge.
