ISDA Master Agreement and Pre-transaction risk: Difference between pages

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A commonly used standardised contract between counterparties trading OTC derivatives.
''Foreign exchange risk management''


1.
Pre-transaction foreign exchange risk arises from needing to commit to a price before actually entering into transactions or commercial agreements.
For example, an exporter may need to publish a price list in the currency of its customers' local market.
Pre-transactional currency exposure also exists when an organisation tenders for a contract priced in a foreign currency, or where there are associated foreign currency costs, for example for materials, labour or other operational inputs.
Some practitioners do not identify pre-transaction risk as a separate class of risk, rather considering it to be a shorter-term type of economic exposure.
2.
The same as Contingent risk as applied to currency management.
Also known as pre-transactional risk, pre-transaction exposure or pre-transactional exposure.




== See also ==
== See also ==
* [[Contingent risk]]
* [[Currency risk]]
* [[Economic exposure]]
* [[Transaction exposure]]


* [[ISDA]]
[[Category:Manage_risks]]
* [[OTC]]
* [[Derivative]]
* [[MNA]]

Revision as of 15:47, 17 March 2017

Foreign exchange risk management

1.

Pre-transaction foreign exchange risk arises from needing to commit to a price before actually entering into transactions or commercial agreements.

For example, an exporter may need to publish a price list in the currency of its customers' local market.

Pre-transactional currency exposure also exists when an organisation tenders for a contract priced in a foreign currency, or where there are associated foreign currency costs, for example for materials, labour or other operational inputs.

Some practitioners do not identify pre-transaction risk as a separate class of risk, rather considering it to be a shorter-term type of economic exposure.


2.

The same as Contingent risk as applied to currency management.


Also known as pre-transactional risk, pre-transaction exposure or pre-transactional exposure.


See also