In a world of multiple currencies, currency risk is created as payments flow between parties in different monetary denominations concurrent with fluctuations in exchange rates.

To counteract currency risk, organizations can lock in the exchange rate used in their foreign currency transactions by a process known as "hedging". For an illustration of Five Hedging Options, consult our guide to currency hedging for companies.

One hedging option for CFOs, treasurers and risk managers is to use the spot fx market. The currency risk of transactions can be hedged by creating an opposing position to their foreign currency transaction. By taking a position in the spot fx market, a firm can effectively "lock in" a currency conversion rate - and thereby reduce their currency risk exposure.

Corporations use FXTrade because it eliminates currency exposure at the lowest possible cost. But there's more:

1. Tailor your position to what you need. With FXTrade you can hedge the exact amount of your transactions. No rounding up or down. The exact amount.
2. Simplify your life and save time. Hedging currency exposure using spot FX typically costs less than buying futures or options especially when you use it in tandem with FXTrade's position flexibility. Your total cost is the amount of the spread: no commissions, no mysterious charges, no ongoing fees. And FXTrade's spreads are among the tightest in the industry.
3. Stop spending more than you have to. You can hedge any time - 24 hours a day, 365 days a year. No need to worry about other countries' holidays. With the click of a button, you're hedged your transaction. And with FXTrade's immediate settlement, what you see is what you have. You always know your precise position, and you can modify it at any time.

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