Risk Management Campaign THE BEGINNING We launched a campaign on Currency Risk Management using BSE currency derivative platform. As a part of this campaign, I shared a daily report of activities and wrote a series of articles on how to manage currency risk associated with export/import business. I conducted a few webinars in collaboration with…
Common Mistakes in Risk Management Click here for FREE Risk Assessment Not having a well-defined Risk management policy. Not having a robust Risk management system , using Excel. Trying to capture highest rate for Export & lowest rate for Imports. Not monitoring the unhedged Exports / Imports Thinking that Export & Import is a Natural…
MANAGING IMPORT RISK BY USING CURRENCY CALL SPREAD -Rajat Prasad One of the biggest risk factors involved in operating an Import Business is that while the overseas purchase and local sale is in progress the value of Indian Rupee may change in comparison to the value of the U.S. dollar (assuming Import…
MANAGING EXPORT RISK USING CURRENCY PUT SPREAD One of the biggest risk factors involved in operating an Export business is that while the Local Purchase & Overseas Sale is in progress, the value of Indian Rupee may change in comparison to the value of U.S. dollar (assuming Export is with USA). This means that the…
BSE CURRENCY OPTIONS Protecting Importer’s cost with BUY CALL option Date : 18 January 2021 Call options are a type of derivative contracts that give holder the right, but not the obligation to purchase a specified amount of Currency at a predetermined price, known as the “strike price” of the option. If the Currency…
Currency Options – An alternative to manage FX risk PROTECTING EXPORT COST WITH BUY PUT OPTION Date : 11 January 2021 Companies in business of export and import are exposed to currency risk. It is wise to protect the cost of transaction against currency fluctuations. Companies can mitigate currency fluctuation risk by Futures and…
CALCULATION OF COSTING RATE AND PROTECTING IT WITH BSE CURRENCY FUTURES ( IMPORTERS POINT OF VIEW) Date : 04 January 2021 Business in international markets is different from handling domestic business transactions at various levels. A company that intends to buy from a foreign supplier must ensure that the transaction is viable, profitable and he…
HOW CAN IMPORTER MANAGE CURRENCY RISK THROUGH BSE CURRENCY FUTURE CONTRACTS Date : Any individual or business that deals with foreign currency is exposed to forex risk. An importer or a foreign currency borrower has payables in foreign currency and he should hedge his business against weakening of rupee. Future contracts may be categorized…
HOW EXPORTERS CAN MANAGE CURRENCY RISK THROUGH BSE CURRENCY FUTURE CONTRACT Date : 14 December 2020 One of the biggest risk factors involved in operating an Export business is that while the Purchase or Sales is in progress, the value of currency may change relative to the value of the U.S. dollar (assuming Export is…