07/02/2017
In a lecture of the derivatives and avoiding risks in Asharqia
Chamber
Head of currency trading
management in Rajhi Bank Raed Bin Abdul Rahman Al Drees said that the investor chooses
the financial derivatives to avoid exposure to the risk of price changes in a
position it obtained or will obtain in the market for a commodity or a specific
currency.
Drees
said in a lecture organized by Asharqia Chamber
in
cooperation with the IO banking Saudi banks titled (financial derivatives and avoiding
the financial risks), on Monday evening, February 6, 2017 and was headed by the
Secretary General of the Committee on Information and banking awareness in
Saudi banks Talaat Bin Zaki Hafidh that with regard to the risk of the market,
they exist by the price behavior of asset prices place of contracting any
fluctuations unexpected derivative contracts prices and also due to lack of
liquidity, which leads to the deterioration of asset prices and the difficulty
of new contracts to counter this deterioration or having monopolized the market
making purchases and sales of large scale, which greatly affecting the asset
prices and the expectations of dealers on the future trends of these prices.
The
risk of credit according to Al Drees as is the loss arising from the faltering
counterparty to fulfill its obligations, organized by the derivative contract
represents a loss to the cost of bringing a new contract replaces the previous
decade and represent the most important policies and procedures that enable
dealers in derivatives markets to manage these risks are: internal control to
amend the credit risk by accessing transactions
with the counterparty and to reconcile the exact dealings therefore the alleviating of the impact of
credit risk, as well as the means by which to support credit and reduce
exposure to risk stumbled parties to a particular process, such as providing
the necessary guarantees. In conclusion the
spokesman and the head of the lecture have been honored with two memorial shields.
