Transform Your Hedging With Strategy Simulator

The Strategy Simulator helps companies evaluate the financial impact of different FX hedging strategies by simulating 20,000 market paths using a Monte Carlo framework. It enables users to understand how hedging decisions and currency exposures affect key outcomes like cash flow volatility, internal rate of return (IRR), and overall financial performance. This empowers teams to make data-driven, risk-informed decisions.

The Simulator uses Monte Carlo simulations to generate a wide array of potential future FX market paths. These simulations are based on historical market data and can be configured with various modeling techniques—such as Geometric Brownian Motion (GBM), Stochastic Volatility, and Jump Diffusion—to represent different market behaviors. This allows users to evaluate strategies under both normal and stressed conditions.

Yes, the Simulator allows side-by-side comparisons of multiple strategies, from simple forward-only approaches to complex multi-leg structures. Each strategy is evaluated under the same set of simulated market scenarios, enabling objective and consistent comparisons.

You’ll need to provide the following:

• Base and exposure currencies

• Notional amount and timing of projected cash flows

• Hedging instruments to be tested (e.g., forwards, options, collars)
  

The Strategy Simulator supports a broad range of FX hedging instruments and combinations, including:

• Forwards – Contracts that lock in an exchange rate for future transactions.

• European Options – Instruments that offer upside potential and are exercised only at maturity.

• Barrier Options – Options that activate or deactivate depending on whether specific exchange rate thresholds are reached.

• Custom Multi-Leg Strategies – Tailored combinations of instruments that reflect advanced hedging approaches.

Historical data reflects past outcomes but does not capture future uncertainty. The Simulator models thousands of potential future market scenarios, allowing you to assess how hedging strategies may perform under a range of conditions. This forward-looking approach leads to more resilient, well-informed decisions.

No. The tool is designed for accessibility. While financial knowledge can be helpful, users do not need to be derivatives experts. The platform provides intuitive inputs, helpful guides, and visual outputs to make the experience understandable for finance and treasury teams alike.

Simulation run times typically range up to 60 seconds, depending on the number of strategies and complexity of inputs. The platform is optimized for high-speed computation without compromising accuracy.

Yes. Results are exportable in formats suitable for internal reports and presentations. Summary tables, risk metrics, and graphical outputs can be easily shared with CFOs, treasury teams, and decision-makers via PDF Export.

The Simulator offers flexibility to adjust key parameters such as volatility, correlation,, and the choice of stochastic model. Users can also input macroeconomic assumptions or market views to better reflect their specific outlook.