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Protection mechanisms: effective management of currency risk using derivatives

Proceeding
DOI: 10.31483/r-126662
Open Access
All-Russian scientific conference «Innovative approaches to management in economic, technical and legal systems»
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Published in:
All-Russian scientific conference «Innovative approaches to management in economic, technical and legal systems»
Author:
Anna S. Pavlikova 1
Scientific adviser:
Iuliia S. Tsertseil1
Work direction:
Экономические стратегии в сфере управления современным бизнесом
Pages:
142-147
Received: 17 February 2025

Rating:
Article accesses:
556
Published in:
РИНЦ
1 FSBEI of HE "Plekhanov Russian University of Economics"
For citation:
Pavlikova A. S. (2025). Protection mechanisms: effective management of currency risk using derivatives. Innovative approaches to management in economic, technical and legal systems, 142-147. Чебоксары: PH "Sreda". https://doi.org/10.31483/r-126662

Abstract

The article discusses origin and types of currency risk, financial instruments for its mitigation for companies making payments in foreign national currency on international markets. The main derivative financial instruments for hedging risks, like forward and futures contracts, options, currency swaps and FRAs are considered. Special attention is paid to the use of such option strategies, like straddle and iron butterfly, allowing to lock potential losses.

References

  1. 1. Hull D.K. Options, futures and other derivative financial instruments: translated from English. 8th ed. M.; SPb. Dialektika, 2019. 1070 p. ISBN 978-5-907144-35-4.
  2. 2. Russian business still has the opportunity to pay in dollars and euros [Electronic resource]. Access mode: https://www.vedomosti.ru/finance/articles/2024/06/10/1042800-u-rossiiskogo-biznesa-sohranyaetsya-vozmozhnost-rasschitivatsya-v-dollarah-i-evro (date of request: 02.03.2025).
  3. 3. Board of options – Moscow Stock Exchange [Electronic resource]. Access mode: https://www.moex.com/ru/derivatives/optionsdesk.aspx?code=CNYRUB_TOM&sid=2&sby=1&c4=on&c6=on&c7=on&submit=submit (date of request: 17.01.2025).

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