Web Trader MT5
A company can agree on a price today but receive the money months later. If the payment is in a foreign currency, its home-currency value may change before settlement. This is transaction risk. A UK exporter expecting €100,000 knows the euro amount, but not exactly how many pounds it will receive when the customer pays. A weaker euro would reduce the sterling value. Companies may manage this exposure with forward contracts, options, matching foreign-currency costs, or earlier payment terms. The risk comes from an identified future payment or receipt, which separates it from the broader effect that currencies may have on a company’s overall business value.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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