Monday, January 31, 2011

"...Google’s Trading Desk" (GOOG)

From MarketBeat:
Who knew? Apparently Dow Jones Newswires’ Chana R. Schoenberger:

When [Google Treasurer Brent] Callinicos joined Google in 2007 from Microsoft Corp., he pitched Google’s executives on starting a cash flow currency hedging program in addition to the company’s existing efforts to hedge foreign exchange exposures on its balance sheet.

Google uses currency forwards to hedge its balance-sheet exposures, which it now identifies using its own software as well as a foreign-exchange risk tracker from FireApps. The new software allowed Google to expand from hedging against “single digit currency pairs to dozens of dozens of currency pairs,” Callinicos said. Those hedges aren’t designed to make money; they are supposed to guard against the firm’s assets losing money as exchange rates change.

Google’s cash flow hedging, which began at the end of 2007, uses a rolling, layered portfolio of options on currencies, meaning they expire at varying times....MORE