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people like to through notional value of derivatives because those numbers look huge but are generally meaningless "the notional value of JPMorgan’s derivative
by qaq 9y ago
people like to through notional value of derivatives because those numbers look huge but are generally meaningless "the notional value of JPMorgan’s derivative trading could be as high as $70 trillion" makes for a eye catching statement. Apple most likely is holding derivatives to hedge currency risks and their exposure has very little to do with notional value.
- twic 9y ago> In theory losses on derivatives would be offset by gains in the value of Apple’s underlying business. That is, in fact, exactly the point of them. If the derivatives are hedging currency exposure, then a move in exchange rates should lead to a change in their value equal and opposite to the change in value of the overseas assets. The whole idea is that they neutralise the effect of changes in exchange rates.