Hedging in the foreign exchange market refers to
Once the farmer plants wheat, he is committed to it for an entire growing season. Tracker hedging is a pre-purchase approach, where the open position is decreased the closer the maturity date comes. Concentration risk Consumer credit risk Credit derivative Securitization. Translation exposure and Operating Exposure. Since , the Bank of Canada has carried out a qualitative annual survey to assess the degree of activity in Canadian foreign exchange FX hedging. Get Free Newsletters Newsletters. Based on current prices and forecast levels at harvest time, the farmer might decide that planting wheat is a good idea one season, but the price of wheat might change over time.