It's very encourging news for the Indian export-oriented companies during the Rupee appreciation period. We have experinece about 10% appreciation in rupee as compare to USD for the last one year. It has its impact on the top-line as well the bottom-line of an export-oriented organizations (like IT companies, BPOs, KPOs and PPOs). I am waiting for next announcement from RBI to map the concrete plan for currency future.
RE:Hedging Risk Time
by ganesh on Jul 03, 2007 04:41 PM Permalink
arre is 10% ne to ley lii hai, i am waiting for tthe day USD will become around 50 (then 41..) otherwise all all have to get ouor contract revised. no point working at 1USD to 41. it make me soooooooo sick, i am sure this congress will f**k up soon and the USd be again 50....inshaallah
RE:Plz explain
by P Gowda on Jul 03, 2007 01:40 PM Permalink
If you cannot understand it do not read it. I fuly understood the article. You should have a financial brain.
RE:Plz explain
by soumya narayanan on Jul 03, 2007 01:44 PM Permalink
it is not necessary to understand everything in life. Try to understand a few things and enjoy that.
Rediff must also ensure that articles are written such that even non experts can understand something.
RE:Plz explain
by PD on Jul 03, 2007 01:54 PM Permalink
understand the terms first,
Futures = A financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. The futures markets are characterized by the ability to use very high leverage relative to stock markets.
Hedge = Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract. Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge).
Currency futures = A transferable futures contract that specifies the price at which a specified currency can be bought or sold at a future date.
In short it is a pre-determined value or amount of certain things which you will deliver to buyer..at a latter stage (consider yourself a seller).
If I am correct (if not pl correct me) this is what this article is about..
Thanks sasank majumdar..as because of his link I could understand this article.
