archived_user
New member
- Dec 7, 2011
- 0
- 0
Ok need to summarise how to approach this
HEDGING A FOREIGN ASSET
if I am LONG Foreign ASSET —–> I go SHORT FC which means I buy DC ( I then use ASK price)
if I am SHORT Foreign ASSET —–> I go LONG FC which means I sell DC ( I then use BID price)
if I am LONG Foreign ASSET —–> I go SHORT FC which means I buy DC ( I then use ASK price)
Which is totally different ballpark if i want to
ROLL FWD a foreign exposure with FX SWAP (hp no market expectations)
if I am SHORT on FX exposure I go SHORT FC which means BUY the DC ( I must use ASK)
if I am LONG on FX exposure I go LONG FC which means I SELL the DC (I must use BID)
it should be OK!
HEDGING A FOREIGN ASSET
if I am LONG Foreign ASSET —–> I go SHORT FC which means I buy DC ( I then use ASK price)
if I am SHORT Foreign ASSET —–> I go LONG FC which means I sell DC ( I then use BID price)
if I am LONG Foreign ASSET —–> I go SHORT FC which means I buy DC ( I then use ASK price)
Which is totally different ballpark if i want to
ROLL FWD a foreign exposure with FX SWAP (hp no market expectations)
if I am SHORT on FX exposure I go SHORT FC which means BUY the DC ( I must use ASK)
if I am LONG on FX exposure I go LONG FC which means I SELL the DC (I must use BID)
it should be OK!