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Within contracted time frame the value the exchange rate decreases

We recommend to use put option as a hedging technique because with a put option we call exchange the currency at a specified price within a given time frame. For an example, if we are exchanging the currency at $110 and if assume that the price will go up, but the exchange rate reversed. We can pay a small fee to guarantee to exercise put option and exchange at $105 within a contracted time frame. If within a contracted time frame the value of the exchange increased to $115, We may also not exercise put option rather we will bear certain charge for the contract that we did. However, if within a contracted time frame the value of the exchange rate decreases to $95, we can exchange the rate at contracted rate i.e., $105. With this put option we would losses that we have to bear.

If GBP depreciates against the USD there will be more revenue for our business and viceversa.

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