It will manage fuel-price risk with hedging better than the competition.
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Derivatives and other tools of financial engineering can be used to manage risk better by hedging positions and transferring unwanted risk to a counterparty, which is what banks say they mostly use them for.
In a May 25 Senate briefing, OCC Chief Counsel Julie Williams said banks regularly engage in risk-mitigating hedging activities as part of their regular business, according to several people who attended the meeting.
Hedging credit risk is not uncommon, and if done properly, reflects sound risk management.
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But if hedging price risk proves to be true for North America, it categorically applies to the North Sea where CNOOC will acquire vital Nexen Buzzard field assets.
Bernstein analyst Steve Powers said Coca-Cola and Pepsi are known to be conservative when it comes to buying and hedging commodities risk, making them less subject to short-term volatility.
He has filed a complaint with the National Association of Securities Dealers, alleging the firm failed to warn him of the dangers of margining his account or to discuss hedging the risk.
The funds gained their moniker for the practice of "hedging" risk by offsetting possible losses with other investments, although -- even more confusingly to the novice -- by no means all hedge funds do this anymore.
We also remain concerned that the Commission has not yet explained its reasons for concluding that its adopted limits especially in non-spot months are necessary or appropriate and that the rules will encourage market participants to seek hedging and risk management alternatives outside of the United States.
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Together, we will have a sharp, renewed focus on our hedging strategies, risk management and execution.
While Hayes was dreaming about a bull market, the hedge fund operators were doing just what they are paid to do -- hedging away their risk.
The US is the group's biggest market, making up nearly a quarter of its sales, but BMW has so far protected itself from the weaker dollar by hedging its currency risk.
But Hormel is hedging some of that risk on top of efforts to pare down the cost structure.
Hedging emerging market currency risk can be expensive because sometimes those markets are not very liquid and when price direction changes, it can be difficult to lift the hedges.
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To Mr Shimpi, this outcome is absurd, the result of an arbitrary wall that has historically separated finance directors, who deal with debt and equity, from risk managers, who deal with hedging and insurance.
Importantly, these bets provide a liquid market for credit risk, which lowers the cost of hedging for those with primary exposure, and provides the market with better information about whether Greece or General Electric is a good credit risk.
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The government's export credit agency, the Export Credits Guarantee Department (ECGD), will launch an Export Working Capital Scheme, a Bond Support Scheme, and will support banks offering foreign exchange hedging contracts to SMEs by sharing credit risk.
That is why hedging in effect insuring against the risk of unexpected currency movements has become such a big business.
When you put those together--because they're hedging each other--it's actually risk-reducing.
The winning submission from MFX Solutions focused on eliminating currency risk for international SME lenders by adopting a proven currency-hedging strategy pioneered in the microfinance industry.
Mr Merton even argued that improved hedging techniques rendered equity capital unnecessary as a cushion against risk.
It utilizes a proprietary hedging program with puts and calls, seeking to reduce risk and avoid sector, interest-rate and market-timing risks.
Banks risk their own capital in the markets, but some of that is hedging positions taken to support client demands.
Conservative investors may consider hedging these positions with a broad market ETF to neutralize the market risk.
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He holds another patent on a risk-reduced portfolio that would combine stock investments with portfolio insurance and such hedging techniques as collars.
Nonetheless, they are hedging their stock market exposure, trying to make money while limiting the risk of losses.
There also seems to be less nervousness about holding risk assets, said Sterling Smith, commodity trading adviser and market analyst with Country Hedging.
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Indeed, mutual funds that used options for either speculation or hedging from July 2003 to June 2007 showed no sign of market-beating returns after adjusting for risk, according to a working paper by Gjergji Cici, an assistant professor at the College of William and Mary.
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