• Dr. Pinakin Jaiswal
• Not Applicable

Importers are worried about exchange rate fluctuation that leads to weakening of domestic currency against the foreign currency. A weak Indian rupee against the US$ could mean shelling out higher amount of Indian rupees to pay US$ import bills. To hedge this risk the importers have conventionally used Forward contracts offered by banks in India. However, with the introduction of the exchange-traded derivatives, two more choices viz. Call options and Futures on foreign currency were made available. This paper aims to see if use of Call option hedge produces a better result for the importer than the use of a Futures hedge. The result was gauged based on the exchange rate realized using the hedges. The lower the rate realized, better it is for the importer. A paired t-test was conducted and it was observed that there is no statistically significant difference observed in the exchange rates realized between the Call option hedge and the Futures hedge.

Currency Futures, Call options, Hedging

"DOES THE USE OF CALL OPTIONS ON FOREIGN CURRENCY PRODUCE BETTER HEDGING RESULTS THAN THE USE OF CURRENCY FUTURES FOR IMPORTERS IN INDIA?", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.9, Issue 7, page no.d361-d364, July-2022, Available :http://www.jetir.org/papers/JETIR2207345.pdf

"DOES THE USE OF CALL OPTIONS ON FOREIGN CURRENCY PRODUCE BETTER HEDGING RESULTS THAN THE USE OF CURRENCY FUTURES FOR IMPORTERS IN INDIA?", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.9, Issue 7, page no. ppd361-d364, July-2022, Available at : http://www.jetir.org/papers/JETIR2207345.pdf