China focus: Deutsche says FX options offer better hedging opportunities

New onshore FX options allow China-based companies to employ longer-term hedging strategies.

China focus: Deutsche says FX options offer better hedging opportunities

Last week’s debut of FX option transactions in China will enable onshore companies to better hedge their longer-term currency exposures, according to Deutsche Bank’s Beng-Hong Lee, head of FX trading, China. Effective April 1, the new rules, issued by the State Administration of Foreign Exchange Safe, will allow trading of so-called European-style FX options between licensed local banks, institutions and corporations.

Options give the buyer the right, but not the obligation, to buy or...

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