Canadian Dollar Hedger
A hedger in the Canadian
dollar market is an individual who uses the futures market to offset price risk when intending to sell or buy the actual Canadian
dollar. Hedging is possible because the Canadian dollar cash prices and Canadian dollar futures prices tend to move in the
same direction. However, the difference between the cash price and the futures price may narrow or widen. The change in the
difference between the cash price and the futures price is called basis risk. Because of the changing basis no hedge
can be perfect.
Where can you hedge the Canadian dollar? The Canadian
dollar can be hedged on the Chicago Mercantile Exchange (CME). The CME offers a competitive and transparent market place to
engage in efficient hedging strategies. If you are interested in hedging Canadian dollar please contact us. One of our experienced Canadian dollar traders will be happy to give you a call to discuss hedging strategies with you.