Layered Hedging Analysis

A layered hedging strategy is an FX risk management approach that gives companies a more precise view of the FX exposures that they need to hedge and provides greater flexibility when hedging. In fact, hedging early (and with longer tenors) and hedging often (with layered hedging) can enhance a company’s risk management results.

Layered Hedging Analysis

Discover the impact of a layered hedging strategy on your company’s international payments and receipts, simply complete the form below.

Our layered hedging analysis quantifies the effectiveness of a layered hedging approach for your company FX activity.

For many years companies have commonly taken one of two approaches for their foreign exchange, either a spot contract approach or set budget rates and executing most of the hedges at the beginning of their financial calendar.

In contrast to “no hedge” (spot contracts) and “static hedge” (forwards booked at the beginning of the year) strategies, a layered hedge approach results in more stable financial results over time and lower deviations in hedge rates period to period, enhancing a company’s risk management efforts.

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