In the process of investment, Hui you can not ignore the risk of trading.
Today, I would like to share with you some preventive measures that I hope will help you.
As long as the financial industry, regardless of the investment behavior, there will be risks.
There is no guarantee of absolute profit.
Because there are risks, it is necessary to avoid taking high risks through some circumvention measures.
The main measures to avoid :(1) choose the appropriate contract.
In foreign trade, borrowing and other economic transactions, the choice of currency as a valuation currency is directly related to whether the subject of the transaction bears risks.
In order to avoid exchange rate risks, enterprises should strive to use the domestic currency as the contract currency, use hard currency in production and capital exports, and use soft currency in imports and capital imports.
Add hedging clauses and other measures to the contract.
(2) Hedging operations through financial markets.
The main methods include exchange trading, futures trading, futures trading, options trading, borrowing and investment, and discount of foreign currency bills.
(3) For the economic entity in the process of balance sheet accounting treatment of conversion risk, usually by maintaining the value of the balance sheet to solve.
This method requires that the amount of insured assets expressed in various functional currencies on the balance sheet is equal to the amount of insured liabilities, so the translated risk position is zero.
Only in this way, changes in the exchange rate will not bring translation losses.
(4) Business diversification.
That is, its sales, production sites and raw material sources are dispersed to the international scope.
Through the diversification of international operations, when the exchange rate changes, the management department can compare the production, sales and cost changes in different regions, seek advantages and avoid disadvantages, increase the output of the branches that are favorable to exchange rate changes, and reduce the output of the branches that are unfavorable to exchange rate changes.
(5) Financial diversification.
That is to find a variety of sources and destinations in multiple financial markets to achieve diversification of financing and investment.
In this way, when some foreign currencies depreciate and some foreign currencies appreciate, the company can offset most foreign exchange risks, so as to achieve the purpose of risk prevention.
The above lists several measures to avoid the risk of foreign exchange trading.
Although THERE are RISKS IN financial foreign exchange, understanding the measures to avoid the risks of foreign exchange trading can help HUIYOU smooth foreign exchange trading, at least to a certain extent.
The dollar tumbled and oil prices rose to a four-week high as the emergency authorisation of COVID-19 oral drugs returned risk taking sentiment.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
