You are bidding on a contract in a foreign currency and you are not sure if you will win the bid.However,the analysis in your bid will be flawed if the foreign currency exchange rate changes between now and when you know whether you have won the contract.The best course of action to hedge your position is

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Quizplus · Accepted Answer

Purchasing an option to sell foreign currency for your currency will hedge your position by allowing you to sell your foreign currency at a set exchange rate in the future, regardless of the market exchange rate at that time. This protects you from potential losses due to unfavorable exchange rate movements. Longing or shorting a currency futures contract would also provide some hedge, but it requires ongoing monitoring and maintenance of the position. Selling an option to sell foreign currency for your currency would not provide any hedge, as you would be obligated to sell the foreign currency at the set exchange rate if the buyer of the option chooses to exercise it.

You Are Bidding on a Contract in a Foreign Currency