1. avatar says

    dear John,
    I jst repeating one of OT fellow’s question
    ”can u plz explain how does the person can sell futures now and buy later when he finds that the future is gonna down i dont understand that bit.
    Thanks in advance”?
    i also really didnt understand this bit as well? and who r the dealers r? what profits belongs to them by buying nd selling the future on behalf us? how does it work in real life? would u mind plz to talk more details about it ?

  2. Profile photo of massivecodedake says

    Hi ,John.I have a question about the last step in money market hedging(EXAMPLE 7 about future payment).Why we need to borrow local currency in 3 months?I mean if we borrow the money in 2 months ,we still can get the money we want(4860204 pounds)now and we don’t have to pay extre interest. THX

  3. avatar says

    Thank you very much Joe for this breakdown and it is a very good lecture. You have brought a very good understanding on how Currency Futures can be used in hedghing the risk, but I have TWO questions relating to Currency Futures and are as follows:
    1. Does it mean that the dealer will have to exercise (sell) the futures by using the exchange rate (Fixed Rate) agreed when the speculor (Financial Manager) bought them or the dealer will have to use the current spot at that time, i.e the spot rate available at the day at which the futures matures?
    2. As you have said that the transaction should be left at risk, does it mean that the dealer will give you the fixed rate to sell the futures or you will depend on the movement of the exhange rates i.e spot rate at that day?

    Thanks very much Joe, my prayer goes to you, to your family and to Opentuition as a whole.

Leave a Reply