Indian companies turn to exotic options to manage fx costs, risks

  • 📰 Reuters
  • ⏱ Reading Time:
  • 35 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 17%
  • Publisher: 97%

Belgique Nouvelles Nouvelles

Belgique Dernières Nouvelles,Belgique Actualités

A few large Indian companies are returning to exotic currency options to deal with the rupee's volatility as they look to manage hedging costs and foreign exchange risks.

Companies are specifically turning to barrier options, a class of knock-out or knock-in options that are exercisable or expire worthless depending on whether a particular level on the underlying asset is reached.

The company is adding barriers to the option structure that it normally does to manage the dollar receivables, the executive said, adding that it is using European knock-in option to manage the costs of the range forward options used to hedge. By adding a knock-in option, the exporter can manage the strike price and premium paid, depending on the view on the rupee and hedging needs.

When used with proper risk assessment, barrier options help to manage the premium cost, a trader with a large private sector bank said.However, the risk is that if the price of the knock-in option is not reached, the customer will be unhedged at the time of expiry, the trader said.

 

Merci pour votre commentaire. Votre commentaire sera publié après examen.

09-11-2018 Malistan Distric, Ghazni Province. Killed 46 Civilians. Armed attack, Taliban StopHazaraGenocide

07-11-2018 Jaghori Distric, Ghazni Province. Killed 90 Civilians. Armed attack, Taliban StopHazaraGenocide

27-10-2018 Urozgan-e-Khas Central City. Killed 31 Civilians. Armed attack, Taliban StopHazaraGenocide

06-10-2018 Lal-o-Sare Jangal, Asad Abad village, Ghor Province, killed 9, Government military StopHazaraGenocide

06-09-2018 Maiwand Sports Club, West Kabul. Killed 26 Civilians. Cuicide attck, ISIS StopHazaraGenocide

Not going to end well

Nous avons résumé cette actualité afin que vous puissiez la lire rapidement. Si l'actualité vous intéresse, vous pouvez lire le texte intégral ici. Lire la suite:

 /  🏆 2. in BE

Belgique Dernières Nouvelles, Belgique Actualités