Delete Initials Field into the Hedging Agreement

Aug 6th, 2022
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How to Delete Initials Field into the Hedging Agreement

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okay the way too fast rundown on option hedging no you dont have to watch 40 minutes of videos its not that hard if youre a long stock you want to protect it you buy a put so if it goes down youre not losing money thats a marry put if you do it the same day its an irs term if you do it after the first day its called the protective put and theres other issues if youre long stock and you want to add income you just want to put some money in your pocket youre going to do a covered call a covered call is when you sell a call with a long position so your long stock sell call thats a covered call very safe you can do it in basically any account you want if you sell a call by itself alone thats a naked call or an uncovered call because you have unlimited risk youre naked just boom youre uncovered theres no protection there thats why its called an uncovered call if youre short stock if you were you wanted to go down youre afraid its going to go up so youd buy a call youd

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IFRS 9 requires the existence of an economic relationship between the hedged item and the hedging instrument. So there must be an expectation that the value of the hedging instrument and the value of the hedged item would move in the opposite direction as a result of the common underlying or hedged risk.
That documentation shall include identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instruments effectiveness in offsetting the exposure to changes in the hedged items fair value or cash flows attributable to the
A hedge accounting is an option, not an obligation both in line with IAS 39 and IFRS 9. Both standards use the same most important terms: hedged item, hedging instrument, fair value hedge, cash flow hedge, hedge effectiveness, etc.
To qualify for hedge accounting, the hedging instrument must be highly effective at offsetting the specified risk during the period the hedge is designated. Effectiveness is addressed in DH 9.
That documentation shall include identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instruments effectiveness in offsetting the exposure to changes in the hedged items fair value or cash flows attributable to the
2(a) of IFRS 9 describes a fair value hedge as a hedge of the exposure to changes in fair value of a recognised asset or liability or an unrecognised firm commitment, or a component of any such item, that is attributable to a particular risk and could affect profit or loss.
For the hedge relationship to be considered highly effective, the dollar offset ratio should be within the range of negative 80% to 125% (the negative indicating the offset). The Dollar Offset method can be used for both the prospective and the retrospective hedge effectiveness tests.
A cash flow value hedge is discontinued when any of the following occurs: Hedge is no longer highly effective (DH 10.4. 1) Hedging instrument is sold, extinguished, terminated, exercised, or expired (DH 10.4.

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