Hedging defensive investment strategies, usually including options to reduce risks and offset possible losses. So what? I recommend it to you, I hope it will be useful to you.

Forward settlement and sale of foreign exchange: locking the exchange rate

For import and export enterprises, forward settlement and sale of foreign exchange can be used as a good means to lock the exchange rate in an agreed period and realize the preservation of value. For example, an export enterprise has dollar income or other bearish currencies after 3 months. In order to lock in the exchange rate risk brought by RMB appreciation during this period, the enterprise can sign a forward settlement contract with the bank, and it is agreed to trade at the agreed exchange rate, currency and amount after 3 months. At present, almost all banks have started this service, among which Shanghai Agricultural Bank completed the first innovative forward foreign exchange settlement product at the end of last year. This product, called Instant Messaging, combines spot inquiry, forward and swap transactions. Forward settlement and sale of foreign exchange allows enterprises to choose between spot settlement and sale price and forward price after adjustment of delivery date. When the appreciation of RMB is slow, it is cost-effective for customers to settle foreign exchange at spot price, and when the appreciation of RMB is fast, it is cost-effective to settle foreign exchange at forward price.

Foreign exchange swap: two-way operation

The so-called swap foreign exchange trading business refers to the business in which both parties make delivery of foreign exchange transactions at the spot and make delivery of reverse foreign exchange transactions at the agreed exchange rate on the agreed future date. That is, enterprises and banks conduct transactions in two opposite directions. For example, a domestic import enterprise needs to import raw materials from a foreign enterprise after receiving the payment of 1 10,000 USD and 1 month, and pay the payment of 1 10,000 USD. If RMB appreciates by 1% within1month, the enterprise will suffer exchange rate loss of 1% after two exchanges. At this time, you can handle spot and 1 month forward foreign currency swap business with the bank.

Foreign exchange options: voluntary exercise

Foreign exchange options are also one of the common methods for enterprises to avoid exchange rate risks. It refers to the option that the contract buyer pays a certain option fee to the seller and buys or sells a certain amount of foreign exchange assets at the specified exchange rate on a future agreed date or within a certain period. That is, after paying the corresponding option premium to the option seller, the option buyer has the right to buy and sell the agreed currency at the agreed exchange rate and amount on the agreed maturity date. If the buyer judges that the situation is unfavorable, he may not exercise this right.

General enterprises often use foreign exchange options for foreign exchange hedging when business contracts have not been finalized. For example, if enterprise A wants to accept the payment of 1 10,000 Australian dollars within three months, it can buy a call option from the bank and stipulate that it has the right to sell Australian dollars at the exchange rate of 0.93 15 Australian dollars 1 US dollars in the future. If the Australian dollar price is higher than 0.93 15, the enterprise can lose the option fee and put the Australian dollar into the spot market for trading; When the value of the Australian dollar is lower than 0.93 15, the enterprise can agree to sell the Australian dollar to the bank at a price higher than the market price at the exchange rate to avoid exchange rate loss. However, it should be noted that some enterprises will operate both call options and put options at the same time, and the seller's profit is limited to the option fee, but the risk is unlimited.

Types of financial instruments

Financial instruments can be divided into two categories according to their liquidity.

Legal tender symbol

This refers to the modern credit currency. There are two forms of modern credit currency: paper money and bank demand deposits, which can be regarded as bank liabilities. They have obtained the qualifications generally accepted by the public, and there will be no trouble in transferring them. This complete liquidity can be regarded as an extreme of financial instruments.

negotiable securities

These financial instruments also have the characteristics of circulation, transfer and acceptance, but there are certain conditions. Including certificates of deposit, commercial bills, stocks, bonds, etc. Their acceptance depends on the nature of this financial instrument.

Long-term debt of more than one year

(1) Securities Securities = bonds

(2) Other cash categories = loans

⑶ Financial derivatives traded on the exchange = bond futures = bond futures

(4) Bond futures options

5] OTC financial derivatives = interest rate swap

(6) upper and lower interest rates

(7) Interest rate options

Strange choice, strange tools.

Short-term debt of less than one year

(1) Securities = bills, mercialPaper.

(2) Other cash = deposits, certificates of deposit.

⑶ Financial derivatives traded on exchanges = short-term interest rate futures.

(4) OTC financial derivatives = forward interest rate agreement

5] Ownership interest: securities = stocks.

5] Other cash categories = None

(6) Financial derivatives traded on exchanges = stock options

(7) Futures stock futures

Become an OTC financial derivative = stock option/exotic tool

foreign exchange trading

(1) Securities = None

(2) Other cash categories = None

(3) Financial derivatives traded on exchanges = spot foreign exchange

(4) Foreign exchange futures and currency futures

5] financial derivatives = foreignexchangeoptions/outlightforward/foreignexchangeswap/currency swap

For derivative financial instruments that are not recognized in the balance sheet or have been measured at cost, excluding hedging instruments, they shall be measured at fair value on the first implementation date, and the retained earnings shall be adjusted.

For embedded derivative financial instruments, if they should be separated from the mixed instruments according to the Accounting Standards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments, they should be separated from the mixed instruments and treated separately on the first execution day, except that it is difficult to reasonably determine the fair value of embedded derivative financial instruments.

Non-derivative financial instruments issued by enterprises containing liabilities and equity parts shall be separated from the equity parts on the first implementation day in accordance with the provisions of Accounting Standards for Enterprises No.37-Presentation of Financial Instruments, except that the fair value of the liabilities part is difficult to be reasonably determined.