imported>Doug Williamson |
imported>Doug Williamson |
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| 1.
| | #Ability to set assets against liabilities in multiple bank accounts. Also used in netting transactions. |
| | | #More generally, the right to reduce or eliminate a liability, by deducting the amount of a related asset. Most commonly, when the asset and liability are with the same counterparty. |
| 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.
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| 2.
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| 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.
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| == See also == | | == See also == |
| * [[Arbitrage]] | | * [[Assets]] |
| * [[Authorisation]] | | * [[Counterparty]] |
| * [[Authority limits]] | | * [[Liabilities]] |
| * [[Basis risk]] | | * [[Netting]] |
| * [[Buy-side firm]] | | * [[Open interest]] |
| * [[CertFMM]]
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| * [[Covering]]
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| * [[Dealer]]
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| * [[Delta hedging]]
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| * [[Effective]]
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| * [[Foreign exchange forward contract]]
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| * [[Futures]]
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| * [[Guide to risk management]]
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| * [[Hedge accounting]]
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| * [[Hedge fund]]
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| * [[Inflation risk]]
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| * [[Interest rate guarantee]]
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| * [[Longevity]]
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| * [[Macro hedging]]
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| * [[MCT]]
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| * [[Option]]
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| * [[Outturn]]
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| * [[Overhedging]]
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| * [[Pre-settlement risk]]
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| * [[Reduce]]
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| * [[Risk response]]
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| * [[Sell-side firm]]
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| * [[Speculation]]
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| * [[Transfer]]
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| * [[Uncovered]]
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| * [[Underhedging]]
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| * [[Warehousing]]
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| ===Other links===
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| *[[Media:2015_05_May_-_The_devil_is_in_the_detail.pdf| The devil is in the detail, The Treasurer, 2015]]
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| *[http://www.treasurers.org/node/8925 Harness your hedges, The Treasurer, April 2013]
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| *[http://www.treasurers.org/node/4592 Falling foul of currency hedging, John Grout, ACT 2009]
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| *[http://www.treasurers.org/node/689 Interest rate hedging: demand the proof, The Treasurer, 2008]
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| [[Category:Manage_risks]]
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| [[Category:Risk_frameworks]]
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