It’s a fair assumption that Temporal / All Current will be on this paper as it was not tested last year. Therefore, does anyone have a quick and dirty way to remember if there is a CTA gain or loss, given FX circumstances. Potentially there will be limited calculations due to time… but who knows. Either way, any help would be appreciated.
All Current - your exposure is based on your “total” net asset position. Total assets - total liabilities. When currencies are appreciating, your total net asset (liability) position will yield a gain (loss). Think of it like an investment in a foreign asset - you win when the foreign currency appreciates. Temporal - your exposure is based on your total net “monetary” asset position - so take your total monetary assets (cash, equivalents, receivables) and back out your short and long term debt/notes. When currencies are appreciating, your total net monetary asset (liability) position will yield a realized gain (loss) on the income statement.
Thanks for your help. All the Best.