A roundup of issues International Treasurer is investigating.
Selling options in treasury is normally accompanied by buying others. That is, as part of a collar strategy. But there are useful alternatives—assuming treasury guidelines are written loosely enough.
Next time your FX policy is up for review, consider this: Are you allowed to execute your hedges over a period of time (rather than immediately); can you act on a currency view; and are you permitted to sell options? For most companies, the answer is probably yes, yes, and no, and that’s the end of it. But if you think you might have some more policy wriggle room, you may be able to collect some premium by selling short-dated calls to offset the cost of options elsewhere.
Meanwhile, in the tech space, treasury software providers are vying for your dollars. Treasury systems providers can be characterized in three ways: First, they are shrinking in number. Second, they are improving and expanding in their capabilities resulting in increasing complexity. Third, they are growing down-market. These characteristics are the drivers behind the active business of treasury management system implementations, even among large companies who have been TMS users for many years. For more information about best practices for purchasing TMS systems, see our upcoming April issue.