Hedging
Quantify committed currency exposure, price a protection strategy, stress-test it, and book it inside board policy limits. Pricing and execution in this demo are simulated.
Exposure register
Committed foreign-currency cash flows and how much of each is already protected
Hedge builder
USD/PHP · $2.21m exposure over 90 days
Notional $1,325,088 · takes USD/PHP coverage from 29% to 89%
Indicative quote
Forward · USD/PHP · 90 days
Rate fixed today for the full tenor. No premium beyond the dealt spread; all upside and downside on the hedged portion is removed.
Scenario stress test
P&L on the full exposure, unhedged versus with this strategy
| Move | Rate | Unhedged | Hedged | Benefit |
|---|---|---|---|---|
| -10.0% | 52.33 | $221k | $87k | $-134k |
| -5.0% | 55.23 | $110k | $43k | $-67k |
| -2.5% | 56.69 | $55k | $21k | $-34k |
| 0.0% | 58.14 | $0 | $-1k | $-1k |
| +2.5% | 59.59 | $-55k | $-23k | $32k |
| +5.0% | 61.05 | $-110k | $-45k | $65k |
| +10.0% | 63.95 | $-221k | $-89k | $131k |
Shocks applied to spot at a 95% one-tailed confidence move; premium is included in the hedged column. Indicative only — not a quote or investment advice.
Hedge book
Open and historic contracts with nightly mark-to-market
| Contract | Instrument | Notional | Rate | MTM | Value date | Status | Action |
|---|---|---|---|---|---|---|---|
hdg-1041 GBP/USD · Sarah Mitchell | Forward 30d tenor | $900,000 | 1.2714 | +$4,820 | 13 Sept 2026 | Scheduled | |
hdg-1039 EUR/USD · James Parker | Collar 120d tenor | $1,100,000 | 1.0785 | −$1,260 | 25 Nov 2026 | Scheduled | |
hdg-1034 USD/PHP · Sarah Mitchell | Window Forward 90d tenor | $640,000 | 58.61 | +$2,190 | 31 Oct 2026 | Scheduled | |
hdg-1028 USD/ZAR · Sarah Mitchell | Option 90d tenor | $120,000 | 18.90 | +$640 | 18 Nov 2026 | Scheduled |
Hedging policy
Enforced by Sherwood before any hedge books
- Board policy: 50–90% of committed foreign-currency exposure inside 12 months must be hedged.
- Speculative positions are prohibited — every hedge must map to a documented exposure.
- Notionals above $1.5m equivalent route to the Group CFO for authorisation before booking.
- Options are permitted only where the exposure is probable but not yet contractually committed.
- Mark-to-market is revalued nightly against indicative rates; this demo prices are simulated.