FIN 315 Project: Currency Exchange Rate Risk Hedge

Create a neat, organized report of your futures analysis & trading with the three sections as follows:

Section 1: Include your name, and a concise description of your analysis. Include why you picked the currency, and your expectation on whether it will appreciate or depreciate.

Section 2: At the end of the trading week, reverse your trade. Cleary explain how your strategy compares to buying/selling FX (no margin trading) in the spot market for the same amount as the futures contract?

The answer MAY need to included:

1, Based on your expectations of the currency movements over the next five days take long or short position in a futures contract for your chosen currency. (I don't expect a very formal analysis and FX modeling. Briefly explain the reason you decided to buy or the sell the futures contract.)

2, What is the size of the FX futures contract? What are your initial margin and maintenance margin requirements? What are the open interest and trading volume?

3, What is the spot FX rate at the time of the trade? What would have been the initial investment (using the contract size from part 3) if you have traded the same amount of FX (without borrowing, i.e. no margin trading) in the spot market?

4, At the end of the trading week, calculate the gains and losses from your futures positions. Were you subject to any margin calls? Why?

I chose the the Australian (AUD) currency. I have attached my trading in the picture below. Please help take a look