EURUSD Hedge Strategies using Options
Forex HedgingÂ
Published on: 14th December 2020

Forex Hedging Strategies
If you have EUR payables and USD receivables then you are possibly concerned about EUR strength against USD. EUR has already climbed 8.2% since this year against USD.Â
It is important to remain hedged. While forward hedge can lock your rate, options can allow you to benefit when EUR softens against USD. Â
Here, we present some low-cost option structures which can provide you protection and at the same time some benefits if EUR depreciates against USD.Â
Maturity: 3 months
Spot ref: 1.2125
Forward premium: 0.0026 (26 pips)
Sell No | Instruments | Buy Eur Call Strike | Sell Eur Call Strike | Sell Eur Put Strike | Cost (USD) |
---|---|---|---|---|---|
1 | Plain Eur Call | 1.2125 | 0.0187 | ||
2 | Plain Eur Call | 1.2075 | 0.0216 | ||
3 | Plain Eur Call | 1.2200 | 0.0151 | ||
4 | Plain Eur Call | 1.2300 | 0.0113 | ||
5 | Eur Call Spread | 1.2125 | 1.2425 | 0.0113 | |
6 | Eur Call Spread | 1.2125 | 1.2325 | 0.0085 | |
7 | Eur Call Spread | 1.2200 | 1.2350 | 0.0056 | |
8 | Eur Call Spread | 1.2200 | 1.2450 | 0.0082 | |
9 | Eur long Seagull | 1.2125 | 1.2425 | 1.2025 | 0.0003 |
10 | Eur long Seagull | 1.2200 | 1.2500 | 1.1975 | 0.0000 |
11 | Eur long Seagull | 1.2150 | 1.2500 | 1.2040 | 0.0000 |
12 | Eur Range Forward | 1.2150 | 1.2025 | 0.0064 | |
13 | Eur Range Forward | 1.2250 | 1.2075 | 0.0000 |