Hedging through Currency Futures - CA Final SFM (New Syllabus) Classes & Video Lectures

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Hedging Foreign Exchange Risk Through Currency Futures:
If the company that is planning a hedge the foreign exchange risk, is an importer and has to settle the payment in foreign currency, it will have the need to buy such foreign currency.
If the importer company decides to hedge the foreign exchange risk through currency futures, then it should take a long position in currency futures, if the currency future contract is given in foreign currency. Inversely, it should take short position if currency futures contract is available in local currency.
If the company is an exporter and has to receive the amount in foreign currency, it will have the need to sell such foreign currency.
If the exporter company decides to hedge the foreign exchange risk through currency futures, then it should take a short position in currency futures, if the currency future contract is given in foreign currency. Inversely, it should take long position if currency futures contract is available in local currency.
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[@kumarjai39]

My god this was so simple i did not know earlier and just ended up getting confused what position should take. Thank you sir for this kind of video.

[@user_suwjhwhqjakoaoq]

Hi sir thank u for your lectures, if possible please incl English subtitles in hindi vidios so that wide range of students can be benefitted

[@dianajohns3779]

I started loving FOREX IN SFM NOW.. i was even afraid to look at a question in this chapter earlier. Sir, you are the best teacher for SFM.... thank you so much!!

[@NikhilJobanputra]

You're most welcome

[@DeepakSharma-bh4mx]

I think the company should opt for another option i.e. to pay immediately at spot rate of $ 64 as it would have a cash outflow of INR 4032000 only. The minimum of all the options available.

[@007PSD]

Can't get simpler than this. Fantastic explanation.🙏

[@NikhilJobanputra]

Glad you liked it

[@aniketbarve887]

Superb clarity Much needed for may 2020 sfm Thanks 🙌

[@chaitanyabogineni976]

Thank you so much sir. I watched few videos a day before exam and it helped to gain few maths just because of your videos.

[@sweetu4717]

sir u explain everything in so easy way... i find derivatives easy just bcz of you

[@camohsinataj842]

Sir,you are just wow!!! I wish I knew about you earlier and could have taken your classes

[@NikhilJobanputra]

Thanks and welcome

[@vivekgupta496]

sir, as you described , exporter with debtor of us dollar , but contract is in INR , So he should take a long position on INR future and if price of future on maturity is higher than contract price , it will be gain , but as per 1(d) of May-19 (Old syllabus ) , maturity price of future is less than the contracted price , but still problem has been solved as gain on maturity as per suggested answer of the Institute , Please explain the reason

[@srinivasansubbaraju9222]

yes even i was confused with same issue plz explain nikhil sir

[@Pooja-hz3cn]

Best..this always haunted me..now my concepts are clear..thank u sir

[@ishakhandelwal3690]

thanks a lot sir!!

[@md.abdurrahman7170]

Very good lecture on Currency future.Thank you sir.Please upload video in English since I am from Bangladesh enjoying your lecture.

[@NikhilJobanputra]

Thanks Abdur. I will surely upload the same in English very soon. Please stay tuned to my channel.

[@abinvincent482]

Thanks beautifully explained.

[@vikasmishra2493]

Thank you sir for uploading videos....it really helps a lot..May God bless you

[@archanapathak1647]

Sir can you please explain that why margin amount deposited is not considered in outflow.only interest is cosidered as outflow

[@utkarshsoni9099]

Because you get your margin back from the bank.

[@parthnathwani9216]

Thanks sir for this beautiful explanation of concept but sir as you said in question no.1 margin should be adjusted with Gain/loss in futures contract, then why don't we adjust margin with the gain of INR 75,000 and same in the question no.2 with the gain of INR 1,15,740.

[@chanduparaselli5342]

I think margin is refundable amount The only loss is interest on margin money which is to be adjusted at end

[@prathyushareddy2137]

Sir in the 2nd problem why we have taken spot price adopted by future market...@29.26 in the video??

[@NikhilJobanputra]

Hi..! Obviously the price that you have to consider is the one adopted by Currency Futures Market, for determining the Gain or loss on currency Futures contract. This is because the other rate given is the rate quoted by the bank for spot transactions which may not be same as the rate adopted by Currency Futures Market.

[@sakshigupta3292]

@@NikhilJobanputra Sir , we took future so that the spot rate exposure can be hedged..why would be compare two rates in the future market only for calculating the gain or loss ?

[@shreshtalakshmi]

Sir, you said margin was supposed to be deposited, but while calculating total outflow why margin was not considered?? @22.11

[@user-zp5qi3pk3q]

Thank you sir, such a simple explanation ❤❤

[@jaspreetkaur-ry6uq]

Sir u explain very nicely, Thanks alot. You connect the concept very deeply and practically. Thanku sir.

[@Vishal-kg6fv]

Sir if margin is in foreign currency then what treatment will be done.

[@myblrapp9627]

Fantastic!!! Millions likes!!

[@yogitakhanna3964]

Sir, I have a doubt that how we will know if the currency futures contract is given in foreign currency or local currency so that it can be determined to take long or short position in case of importer company. I would be thankful of your reply .

[@prarthanapawar7931]

Thank you so much sir..you are just awesome👏👏

[@aswathychicku3277]

Omg !! Dat was really awsum.. I had never understood this logic before until I came across your video. Thanks a ton sir 👍

[@NikhilJobanputra]

You are most welcome

[@msr4958]

Class is superb sir

[@swatibhilare4539]

Hello sir....these scenarios from importer point of view....have you uploaded sums on pointof view exporter.... couldn't get find....

[@hhanumantharaya]

Sir after watching ur class I am very clear regarding the forex but I have some doubts about direct and indirect quote how can I simply remember this sir please help me

[@parthnathwani9216]

Sir , In case of hedging through options we consider the premium paid while calculating the total outflow then in case of hedging through futures why we are not considering the margin paid for the futures contract ? Sir, Please explain the logic behind it . Thanking you in anticipation.

[@anilmishra1523]

Bro actually margin paid is not an expense it's just a deposit and will be returned at the end of contract while the premium is a kind of outflow that option holder has to bear even if option not exercised.

[@gulshamaansari2299]

God bless u sir... Ur videos r really very helpful

[@mohdtajuddin2182]

Sr plz post equity valuation models videos

[@jayg4212]

Hello sir . What are the types of currency hedging ???

[@cakunalsinghal22]

sir is it related to derivatives chapter

[@koppadipraveena5027]

That was so clear sir.. Thank you

[@shalini3158]

U r great sir 👌🙏

[@sidharthsrivastava6228]

Thank you sir!!! Please explain all d questions whose solutions r not given in your book. Actually I purchased your book but many solutions r not given which creata a problem.. Please sir...

[@NikhilJobanputra]

Hi Sidharth, Please contact me directly in this regard.

[@hhanumantharaya]

Ur my inspiration sir ,sir how can I attend your live class for sfm sir

[@georgiasheriff7443]

Can we have this in English please?🥺

[@NikhilJobanputra]

Definitely Yes..!! I shall upload the English Version of this Video ASAP

[@DharmendraGupta-yc8kz]

Sir plz foreign currency borrowing and investment ka video daliye

[@msr4958]

🙏🙏🙏🙏

[@SakshiGupta-bd1fv]

Thanku for much needed help

[@dikshagupta2629]

Thank u so much sir for this video

[@janthapurohit]

Very much useful sir

[@srinivasansubbaraju9222]

sir plz explain may 2019 old syallabus 1(d) currency futures sum

[@nagendranagu7129]

Sir where can we access your notes pdf

[@DEEPAKKUMARSINGH-be3oj]

Thank you so much sir

[@avaneebhatt7786]

Thank you Sir!!

[@ayushman3359]

Awesome

[@dayareddyy]

thanks a lot sir

[@NikhilJobanputra]

Most welcome

[@JaspalSingh-si4yt]

Very well explained by you sir❤️

[@swatibhilare4539]

Is there any way....to watch all your derivatives class on contine basis...

[@swatibhilare4539]

Like concept#1 2 3 for derivatives

[@NikhilJobanputra]

Avail the complete videos. Please call at 7400448022

[@swatibhilare4539]

@@NikhilJobanputra thank you sir...

[@moviebuzz7652]

Sir is english classes available?

[@NikhilJobanputra]

Yes Dear..! Classes in complete English are available. Please Contact Meeta Madam at 7400448022

[@badadharavikram5035]

Thanks You Sir..

[@himakr4079]

Sir please speak in English ...understanding will be much easier for everyone...

[@kapilsen4902]

Thank ☺️ u sir

[@ramgovind8685]

Sir fcff fcfe concept please upload

[@NikhilJobanputra]

Sure... At the earliest

[@kapilsen4902]

Omg it's ladoo

[@kkantajay]

Thanks you SIR 🙏🙏

[@akshayaravi8536]

pls use english sir.

[@anjalishrivastavsoni2049]

Sir please speak in English only... Every one will understand.. As we have to write paper in English.

[@NikhilJobanputra]

Thanks Anjali for the feedback. I will have my videos of CA Final in both the languages. My all videos on CFA Level 2 are in english only.

[@neetujain5381]

Aap convert kr lena

[@segunhudu260]

pls try to teach in English pls