Tuesday, April 10th
8:30am – 9:45am
This presentation will show the many pitfalls corporate treasurers face in the path to hedging outperformance. It is daunting enough to try to protect your company from geopolitical risks causing sharp currency moves. The next step is to create value via the risk management. We will highlight what can go wrong using historical examples and cautionary tales.
Corporate treasuries have long used back-testing to prove theories about exchange rate behaviors. We will present some of the mistakes to avoid when using those tools. We will also show that a decision about the best hedging instrument is not as easy as it sounds. All this will be done with live pricing of instruments demonstrated in front of the audience.
Next, we will highlight some of the fundamental considerations when taking up the challenge to beat the budget rate and we will talk about speculative trading, especially by hedge funds and speculators, as opposed to corporate hedging. We will highlight the classic trades that portfolio managers use to enhance their returns.