2006-12-24 21:37:32 · 3 answers · asked by Frank 1 in Business & Finance ➔ Investing
This is part of International Currency Trading.
It is to book NOW the purchase of Foreign Exchange (Dollars/Euro/Yen/British Pounds etc) at a FUTURE DATE at a particular FUTURE Exchange Rate as given by the Bank on the booking date.
It is like an advance reservation - but with the risk that you may lose or if you are lucky, you may gain. If a company or Government needs a large chunk of Foreign Exchange, say only 6 months from now, and if one's own currency is likely to depreciate (inflation or global economic conditions), the risk is well worth taking.
The same can be done for commodities - like Coffee, Wheat, Sugar and Crude Oil. SouthWest Airlines had booked Aviation Fuel based on future crude oil @ $ 40 per barrel for 4 years....and with the crude prices shooting up to $ 70 and now around $60, the Airlines has made a kill and has turned out to be the most profitable carrier in the world!
2006-12-24 22:00:08 · answer #1 · answered by bagsprosh 4 · 0⤊ 0⤋
Forex is a secure on line trading forum. 24/7 it is one of many investment trading groups.
2006-12-25 05:53:00 · answer #2 · answered by KEN C 2 · 0⤊ 0⤋
Hi, i suggest a great site with plenty of Issues related to your Investing and everything around it. it also provide clear and accurate answer to many common questions.
I am sure that you can get your answers in this website.
http://investing.sitesled.com/
Good Luck and Best Wishes!
2006-12-25 06:47:59 · answer #3 · answered by Anonymous · 0⤊ 0⤋