Hedging methods of companies in Bursa against exchange rate risk

Firms dealing with foreign trade encounter uncertainties in exchange rates that are difficult to predict. Since foreign trade activities involve buying and selling transactions from abroad in foreign currency, fluctuations in exchange rates affect the profit-loss status of foreign trade companies, and even affect the international competitiveness of the enterprise and its marketing operations. Being able to manage and reduce the exchange rate risk is becoming increasingly important for these businesses. Therefore, businesses need to know the exchange rate risk types and apply hedging methods to protect themselves from risk so that they can take precautions against the losses that may occur as a result of the change in the exchange rate and minimize the losses arising from the risk. In this study, it is aimed to investigate the hedging methods and behaviors of companies in Bursa against exchange rate risk. For this reason, it is aimed to investigate the use levels of these techniques by the companies engaged in foreign trade activities in the list of the top 250 large firms regularly announced by Bursa Chamber of Commerce and Industry every year, the performance of the companies using protection methods and which method is used more frequently. As a result of the research, it has been concluded that the level of use of hedging methods by the participating enterprises is high and the forward method is mostly preferred.