Today, I’d been to a session where I was educated about the importance of hedging against the Dollar falling again against the Rupee. The gist was this, “you buy Futures the bank’s gonna profit through margin money. You buy Options, the bank’ll debit your fees”. “You may lose some money but it’s all about minimizing risk, honey!!” “Hedging is not about another way to increase your profit, but a way to minimize your losses”.

Well! not exactly their words, but they meant it.

If it’s so risky, WTF are we using Dollars to trade then ? “Then, Uncle (Sam) had heap many dollars. Now, Uncle borrows heap many dollars to pay us”. If this news’ anything to go by, it’s a matter of time, countries switched to saner alternatives.

Now, what are the alternatives ?

Why not bill in Rupees ? Will the rupee hold ? Won’t it fall if the boom is not sustenable ?
How ’bout the Euro ? Who says the Euro will not go the dollar way ?
Hmm. How ’bout gold ? Ha! Ha!! How are you going to bill ? One gold bar per hour :-)

So, the alternatives suck. And we need to hedge against the Dollar falling yet again. Or rising up!!
Whatever happens, the bank makes money!! Why not close shop and help others hedge as well ?

In Over the Hedge, RJ says:

RJ: Now, the traps are set here, here, here, here, here, here, here, here, here, here, and here. Here, here, here, here, big one here, here, and maybe a few over here.
Stella: Gee, it’s that all?
RJ: No. There’s bunch of red lights all over here. You OK, Verne? Look a little green.
Verne: I blacked out for a second there, but… I get the idea: there’s lights, traps and I might need to change my shell.

By shashi

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