CONSIDERATIONS UPON THE SELECTION OF CURRENCY HEDGING STRATEGIES – BETWEEN OPORTUNITY AND APPLICABILITY

Ioan Ovidiu Spatacean () and Paula Nistor ()
Additional contact information
Ioan Ovidiu Spatacean: Universitatea “Petru Maior” din Tîrgu–Mures Str. Nicolae Iorga, nr.1, Tîrgu – Mures, MURES, 540088, România
Paula Nistor: Universitatea “Petru Maior” din Tîrgu–Mures Str. Nicolae Iorga, nr.1, Tîrgu – Mures, MURES, 540088, România

STUDIA UNIVERSITATIS PETRU MAIOR SERIES OECONOMICA, 2009, vol. 1/2009, 57-78

Abstract: In conditions of high exchange rate volatility, entities conducting foreign trade transactions are subject to currency risk exposures, which may have a significant impact on financial performance and operating profitability. The research approach is oriented to identify the possibility to implement viable strategies for currency hedging, as an essential component of risk management operations for entities holding assets or liabilities denominated in a currency. Research methodology is based on the analysis of derivative transactions (futures contracts), carried on Monetary Financial and Commodities Exchange of Sibiu (Sibex), for the purpose of defining viable strategies to hedge currency risk. As an alternative to the domestic financial derivatives’ market, in order to overcome certain deficiencies relating to the liquidity of financial instruments, it was also examined the Forex market, to test the opportunity of receiving protection against currency risks.

Keywords: risk management; financial derivatives; volatility; hedging strategies (search for similar items in EconPapers)
JEL-codes: E22 F21 G11 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.upm.ro/facultati_departamente/ea/RePEc/ ... economica0901_04.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pmu:oecono:v:1/2009:y:2009:p:57-78

Access Statistics for this article

More articles in STUDIA UNIVERSITATIS PETRU MAIOR SERIES OECONOMICA from Petru Maior University, Faculty of Economics Law and Administrative Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Bogdan Voaidas ( this e-mail address is bad, please contact ).