Prado (2008) discusses the risk that is inherent to foreign exchange
derivatives operations, centering her analysis in the “principle of foreign exchange
lock”, a kind of range within which the exchange rate can vary without causing
losses to either party. With such mechanism, the losses for one of the parties
would happen in case the exchange rate reached and exceeded the preset
minimum or maximum. That seems to have happened to some companies that
did not expect an abrupt and accentuated depreciation of the Real, when they
locked their foreign exchange positions below 2 Reais per dollar