Fixed forward contract and Fixing derivative: Difference between pages

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imported>Doug Williamson
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imported>Doug Williamson
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''Risk management - foreign exchange.''
''Risk management''
A derivative which hedges an exposure to a variable market rate or market price by effectively fixing a hedged market price or rate for it.


A fixed forward contract is a foreign exchange forward contract with no option elements.
Examples include forward contracts, futures contracts, FRAs and swaps.


It can be viewed as a ''plain vanilla'' forward contract.
Contrasted with insurance-type instruments, such as an options.
 
 
Contrasted with a ''dynamic'' forward contract.
 
 
:<span style="color:#4B0082">'''''Corporates act to mitigate FX volatility'''''</span>
 
:Payment fintech Moneycorp suggests a number of ways in which corporates can mitigate the impact of FX exposure...
 
:Make use of forward contracts: Forward contracts, either fixed or dynamic, can be customised to allow companies to lock an exchange rate for a future overseas payment.
 
:''Philip Smith, editor, The Treasurer online - 14 October 2022.''




== See also ==
== See also ==
*[[Contract]]
* [[Derivative instrument]]
* [[Corporate]]
* [[Fixing]]
* [[Deal contingent forward]]
* [[Dynamic forward contract]]
* [[Fixing instrument]]
* [[Foreign exchange]]
* [[Foreign exchange forward contract]]
* [[Foreign exchange risk]]
* [[Forward contract]]
* [[Forward contract]]
* [[Forward exchange market]]
* [[Forward rate agreement]]
* [[Forward foreign exchange rate]]
* [[Forward market]]
* [[Forward price]]
* [[Forward rate]]
* [[Futures contract]]
* [[Futures contract]]
* [[Hedging]]
* [[Insurance]]
* [[Plain vanilla]]
* [[Opportunity loss]]
* [[Risk management]]
* [[Option]]
* [[Risk response]]
* [[Swap]]
* [[Transfer]]
 
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]

Revision as of 11:47, 5 March 2017

Risk management

A derivative which hedges an exposure to a variable market rate or market price by effectively fixing a hedged market price or rate for it.

Examples include forward contracts, futures contracts, FRAs and swaps.

Contrasted with insurance-type instruments, such as an options.


See also

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