Find the exposure before you think about the trade
Identify an FX exposure by naming the foreign-currency amount, date, direction, and business objective at risk.
The move: identify the risk before naming the product. ISO 31000 frames risk as the effect of uncertainty on objectives. In FX, the uncertainty is the exchange rate; the objective might be margin, budget, cash timing, or reporting stability. That means the first task is not to ask for a quote. The first task is to describe the exposure. A useful exposure row has six fields: currency, amount, direction, expected date, objective at risk, and confidence. Direction matters because paying EUR is not the same as receiving EUR. Confidence matters because a signed invoice is different from a possible sales…
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