The price of the spot dollar, and interest rates both in Mexico and the United States are constantly changing,
and this is what forms futures prices. MexDer. Examples with Futures Contracts
Section 5 shows the terms and conditions of contracts traded on
The following describes the example of a Mexican company that wants to cover an exchange risk on its accounts receivable and accounts payable using futures contracts on the Chicago Mercantile Exchange (CME) and on the MexDer.
STRATEGY FOR HEDGING LIABILITIES WITH FUTURES
If a Mexican company has a liability in dollars that must be settled in the future, it can hedge the exchange risk (the devaluation of the Mexican peso against the U.S. dollar) as follows:
I: With a short hedge: Taking up a short position in futures contracts on the Mexican peso, on the CME.
$ .1515 $ .1538
II. With a long hedge: Taking up a long position in futures contracts on the U.S. dollar on MexDer.
If the peso loses ground against the dollar, the company will owe more pesos for each dollar of its debt, but it will also gain the difference in its future contract positions.
N$ 6.6 Price