3 Jim Logan, owner of the Sports Exports Company, is concerned that the pound may depreciate substantially over the next month, but he also believes that the pound could appreciate substantially if specific situations occur. Should Jim use currency futures or currency options to hedge the exchange rate risk? Is there any disadvantage of selecting this method for hedging?

The Sports Exports Company receives pounds each month as payment for the footballs that it exports. It anticipates that the pound will depreciate over time against the dollar.