Forex Hedge Accounting Treatment
OANDA’s FXConsulting
for Corporations
18
Speculative Trading
Speculative trading can be very profitable or very costly. Some individuals make a fortune from
currency speculation, while others (especially if not properly controlled or monitored) cause massive
losses for their employers.
Regardless of the speculative outcome, the results must be captured and reported separately. As an
added measure of caution, ensure there is proper segregation of duties between those authorizing the
speculative trades and those reporting on their profitability. Finally, note that margin accounts outside
existing banking credit relationships are an excellent way to limit speculative losses.
We do not recommend companies engage in foreign currency speculation unless they have forex
trading experts on staff and the companies truly understand and manage the risks associated with forex
speculation. We would prefer to see companies focus on what they excel in and avoid businesses they
do not understand such as forex speculation.
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