Hedging

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Revision as of 09:25, 9 February 2016 by imported>Doug Williamson (Link with Buy-side firm page.)
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1.

Traditionally hedging refers to the process whereby a firm uses financial instruments (such as forward contracts, futures contracts or options) or other techniques to reduce the impact of fluctuations in such factors as the market price of credit, foreign exchange rates, or commodity prices on its profits or corporate value.


2.

The application of hedging techniques has been extended to the management of many other risks including for example inflation and longevity risk arising in pension funds.


See also


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