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What is the risk control strategy for foreign exchange trading


the use of financial derivatives to hedge the forexrebateindonesia of cashbackinforex Forex rebate king transactions: 1. The application of financial derivatives (1) the reasonable application of forward foreign exchange transactions forward foreign exchange contracts are usually irrevocable, it is to protect the income Forexrebateking cash flow tools to use this hedging tool is the key to the future exchange cashback forex expectations, if the actual change in the exchange rate does not match the expectations, it is locked in the risk, but also lost due to the benefits thus, this hedging Tools commonly used in conservative management strategy (2) the rational use of foreign exchange futures foreign exchange futures trading options, also depends on the exchange rate expectations and credit risk, but futures have a unique margin system, it is the leverage of gains and losses, neither limit the risk, nor limit the return (3) the rational use of foreign exchange options trading from the perspective of avoiding foreign exchange risk, foreign exchange options are foreign exchange forward contracts and foreign exchange futures The difference is that it has the right to choose, the option buyer can give up the performance, thus changing with the market situation, to obtain unlimited benefits As banks consider that foreign exchange delivery will usually be carried out under extremely unfavorable circumstances, the corresponding will increase transaction costs, therefore, when doing option transactions, should be as short as possible to shorten the future uncertainty time, in order to obtain a more favorable forward exchange rate (4) the rational use of swap transactions In currency swap transactions, because the exchange rate is predetermined, traders do not have to bear the risk of exchange rate fluctuations, and thus can play a hedging role currency swap exchange rate agreed by the two sides of the transaction, and swap transactions are often longer term, and thus in the hedge of long-term foreign exchange risk it is more concise than futures, forward contracts, etc. Swap transactions are the most effective financial instruments to reduce the cost of long-term funding, to prevent interest rate and exchange rate risk 2. The use of derivative financial instruments to hedge risk should adhere to the principle of prudence Various hedging measures have advantages and disadvantages, economic entities should be based on their own business needs, carefully choose hedging tools First, to hedge foreign exchange risk to pay the corresponding management costs, therefore, to accurately account for the relationship between management costs, risk reward, risk loss Second, should be a comprehensive consideration, as far as possible, by offsetting the different items under the Finally, there are various ways to prevent foreign exchange trading risks and achieve different results, so economic entities should choose reasonable hedging programs according to their own situation
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