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Okay, seriously please don’t laugh at me for this one but my brain cannot figure this out (and for some reason I can’t find the answer to this basic question anywhere):
Foreign currency hedges (forwards and futures), when are they entered into? What I mean is at what time. So, if I have a foreign payable of $1,000,000 and am nervous about the dollar depreciating against that foreign currency do I enter into the futures hedge the day I record the payable? If not then I can’t see where the hedge could offset the loss (if it were to happen).
Again, dumbest question ever but I can’t for the life of me find the answer to this…
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