Statrys Forex 101: What Does Hedging Mean?
Learn why currency hedging is critical for SMEs and start-ups to protect their business from foreign exchange fluctuations.
In this episode of Statrys Forex 101, Jonathan Cusimano, Head of FX at Statrys, explains what hedging means and why it is essential for businesses exposed to foreign currency movements. If your company receives or pays in multiple currencies, understanding hedging is critical to protecting your margins.
The video introduces hedging as a practical risk-management tool that allows businesses to reduce the impact of unfavourable exchange rate fluctuations by locking in future exchange rates. Jonathan also outlines the main approaches companies use to manage FX risk, depending on their exposure and risk appetite.
Key Takeaways
- What hedging means in the context of foreign exchange
- Why currency fluctuations can directly impact business margins
- How hedging helps reduce FX risk for international businesses
- The difference between no hedging, partial hedging, and full hedging
- When businesses typically choose to hedge their FX exposure
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