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ACCA P4 Foreign Exchange Risk Management Currency futures lecture 1b
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Hi
Am i correct in my understandinf that with futures the transaction will either make a gain or loss and therefore the deal will be the opposite ie if the transaction made the gain the deal will always result in making a loss.
Thanks
That is what we want to happen, and that is what will happen provided then when we started the futures deal we bought or sold futures depending on whether we are receiving or paying the other currency.
Thanks am i right in thinking that when we are recieving the foreign currency we will always buy futures and when we are paying in the foreign currency we will always sell futures?
No.
I the transaction is paying the same currency as the currency that the contract size is stated in, then we buy futures. If the transaction is receiving the same currency as the currency the contract size is quoted in, then we sell futures.
excellent!!!
Thank you for your comment 馃檪
Sir, it would be very grateful if we could have lectures on acquisitions & mergers as well as the corporate reconstruction & organisation, thanking you in advance.
I will record when I have the time. However there are no additional techniques required that are not covered in other lectures.
The problem is more one of approach, which is why I have recorded several lectures working through past question 1’s from the exams. In them I discuss the approach as well as, obviously, the technical aspects.