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How to hedge currency risk with options?

Zerodha (Flat Rs 20 Per Trade)

Invest brokerage-free Equity Delivery and Direct Mutual Funds (truly no brokerage). Pay flat Rs 20 per trade for Intra-day and F&O. Open Instant Account and start trading today.

By trading currency options, an investor can hedge against the risk of price increases and losses. Currency options are similar to regular options on stocks, indices or commodities and comprise two types of options - call and put options, which can be traded on exchanges or on any registered online trading platform. A put option protects the buyer of an option against a fall in the price of a currency, while a call option protects an option against a rise in the price of the currency. The advantage of such a strategy is that you can hedge against unfavourable developments for a premium


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