How to hedge foreign exchange and how to calculate it, for example. A company has 5 million foreign exchange income after 6 months. At present, the exchange rate of US dollar against Japanese yen is 1: 1 10. 201February 24, the closing price of foreign exchange is USD against JPY 80.96, USD against RMB 6.2954 and RMB against JPY 12.5438+06.

Your company remitted US$ 5 million for half a year, and now it is estimated that RMB will appreciate by 2% against the US dollar after half a year. Then we should sell 5 million dollars now and change it into RMB. After half a year, the RMB appreciates by 2%, and we can buy back 5 million dollars to close the position, so that we can earn the difference of RMB appreciation by 2%. This behavior is called "hedging", also called "hedging". The advantage of this is that the income of the US dollar remitted to your company after 6 months will decrease after the appreciation of RMB 2%, and the losses caused by the appreciation can be offset after hedging.

If six months later, the Japanese yen depreciates against the US dollar, the RMB depreciates against the Japanese yen and the RMB appreciates against the US dollar. Then you can change US dollars into Japanese yen and then RMB, so that your company can get extra income.