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Layered Hedging Strategy

A layered hedging strategy is a risk management procedure designed to increase flexibility when hedging a company’s future currency exposure. It involves using products with different start and maturity dates instead of a one-off hedging product that covers the whole year’s forecast exposure. Companies using this approach gain two major advantages: they can calculate the […]

Letter of credit

A letter of credit is a bank document employed to ensure completion of a transaction between a customer and a supplier. Through this letter, the bank guarantees that payment will be received by the supplier in a timely manner and in full. The letter of credit involves four parties: the purchasing client, the client bank, […]

Leveraged Forward

A Leveraged Forward contract is an over-the-counter derivative product that allows buyers to lock-in more favourable exchange rates than an outright forward for part of their exposure as well as to benefit from favourable market movements using leverage. The leverage defines the amount of risk the hedger is willing to assume. Due to their complex […]

Leveraged trading

Leveraged trading is a  trading practice that allows speculators to trade in larger volumes in financial markets, and is very popular in the foreign exchange market. This speculative action has grown exponentially in recent years due to the sharp rise in number of online leveraged trading platforms. Here, retail forex brokers allow traders to open […]

Like-for-like settlement

Like-for-like settlement is a payment collection method by which an export company –normally an ecommerce business or an international retailer – receives payments in local currencies. More info Currency Accounts Dynamic Pricing Payments Factory This settlement solution provides two major advantages. On the one hand, it allows the exporter to sell its products in the […]

Limit order

A limit order in foreign exchange is a transaction order with an indicated restriction on either the maximum price to be paid in one currency in order to purchase another, or the minimum price to be received in the currency being purchased. Limit orders are an effective method of managing foreign exchange risk by assuring […]

Limit-Order

Eine Limit-Order ist auf dem Währungsmarkt ein Transaktionsauftrag mit einer bestimmten Einschränkung bezüglich des Höchstpreises, der in einer Währung bezahlt werden soll, um eine andere zu kaufen. Limit-Orders sind eine effektive Methode für Unternehmen ihre Kosten unter Kontrolle zu behalten, da sie dadurch sicherstellen können, dass eine Transaktion innerhalb eines bestimmten Preisrahmens bleiben wird. Sie […]

Line of credit

A line of credit is a loan facility agreement between a lender and a borrower. A total amount is agreed for the credit line. It is extended to creditworthy customers by banks and money lenders. Lines of credit form an integral function in assisting businesses in completing purchasing operations. Advantages to using a line of […]

Liquidity

Liquidity is a financial concept that refers to the ability to convert assets into cash. It is crucial for a company to have good liquidity in order to pay its bills in a timely manner. In order to fulfil payment obligations on an ongoing basis, a company must ensure that total cash flow exceeds total […]

Liquidity ratio

Liquidity ratios are used to measure the level of cash or assets that could quickly be converted into cash belonging to a company or individual. These assets are what allow them to meet their short-term debt obligations. The higher the ratio, the lower the credit risk, which is the company’s risk of default. This ratio […]