This document discusses various hedging instruments including swaps, options, futures, and forwards. It notes that swaps exchange loan and principal amounts between currencies. Options, specifically calls and puts, give the holder the right but not obligation to buy or sell a currency at a specific price within a time period. Call options are executed if the currency goes up, while put options are executed if the currency goes down.

1. Why to look for hedging instrument?
 Swap
 Call and Put option
 Future and forward

3. Negatively Correlated assets

6. Exchange of loan and principle
amount of one currency to the
same of other currency

7. Currency option
Currency option gives the holder of the option the right ,but not obligation to buy or sell a
specific currency for a specific price during a specific time period.
1.Call Option
2.Put Option
Call option
Pay
premium
Buy put
Put option
Pay
premium
Buy call
If goes up
execute if
not leave it.
Execute if it
goes down.