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why we always use long position for hedge

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › why we always use long position for hedge

  • This topic has 1 reply, 2 voices, and was last updated 12 years ago by John Moffat.
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  • October 25, 2013 at 11:42 am #143653
    Hassan
    Member
    • Topics: 1
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    why we always use long position for hedge

    October 25, 2013 at 3:36 pm #143680
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54821
    • ☆☆☆☆☆

    We don’t always use a long position!

    It depends what we are hedging – the risk associated with the receipt of foreign currency; the risk associated with the payment of foreign currency; the risk associated with the borrowing of money; or, the risk associated with the depositing of money. (and also which instruments we are using)

    For some of them we take a long position and for some a short position.

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