SALES AGENT: I have this awesome product made in the USA I want to sell in Europe. It's cheap now, but what if the euro goes down against the dollar? I could lose a lot of money on inventory.
BROKER: No problem, just buy a future for the amount of
US dollars you'll need to pay your suppliers.
SALES AGENT: You mean, a
futures contract for dollars?
BROKER: Yes, a euro-pegged future for dollars. When the contract comes due, you pay the euros, they pay you
the dollars, and BOOM! You're good to go. No risk.