Your Firm Is an Italian Exporter of Bicycles

Your firm is an Italian exporter of bicycles. You have sold an order to a British firm for £1,000,000 worth of bicycles. Payment from the customer (in pounds sterling) is due in 12 months. Detail a strategy using futures contracts that will hedge your exchange rate risk. Have an estimate of how many contracts of what type and maturity.

A) Go long 100 12-month pound futures contracts; and long 125 12-month euro futures contracts.
B) Go short 100 12-month pound futures contracts; and short 125 12-month euro futures contracts.
C) Go long 100 12-month pound futures contracts; and short 125 12-month euro futures contracts.
D) Go short 100 12-month pound futures contracts; and long 125 12-month euro futures contracts.
E) None of the above