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What are the financial instruments to control foreign exchange risk?

Financial instruments to control foreign exchange risks include forward foreign exchange contracts and futures contracts.

1. Forward foreign exchange contract: This is a simple and applicable exchange rate risk management tool. After calculating the future exchange rate, an agreement is reached based on the forward exchange settlement and sale price to avoid future exchange rate fluctuations. risk.

2. Futures contract: Futures is a standardized contract, a foreign exchange trading tool that can be bought and sold at a specific price on an exchange. Futures buyers agree to purchase foreign exchange at a specific price on a certain date, thus avoiding the risk of foreign exchange fluctuations.