Hedging Demand

Hedging Demand

Demand or orders for securities that are used to diversify or otherwise reduce risk beyond normal mean-variance diversification. Hedging demands represent a desire for a risk-averse portfolio. See also: Risk analysis, Modern Portfolio Theory.
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The strong growth in ICE Low Sulphur Gasoil futures volume is driven by rising hedging demand from European refineries to meet winter diesel specifications and increasing hedging activity in cross-Atlantic diesel arbitrage flows.
This strong growth was driven by rising hedging demand from European refineries to meet winter diesel specifications and increasing hedging activity in cross-Atlantic diesel arbitrage flows.
Consistent with this explanation, we find that the patterns we document are related to firm-level proxies for hedging demand, as well as economy-wide measures of information asymmetries.
However, hedging demand from IT sector, pushed it back up towards 60.
This is particularly the case since the financing of the hedging activity may itself generate domestic currency appreciation that in turn generates further hedging demand.
aspx), a cross-market gauge of risk, hedging demand, and investment flows.
The company said that it has launched the Global Financial Stress Index (GFSI), which would allow customers to gauge risk, hedging demand and investment flows.
In other words, the current financial-settlement derivatives used in the maritime industry are not sufficient for hedging demand uncertainty in the trucking industry because those derivatives are operated separately from the physical shipping markets.
Futures hedging demand are presented with respect to a representative hedger who needs a long hedging to avoid risks from price changes, and the effects of the normality restriction and its relaxation on the estimated hedge ratios will be emphasized.
The solution corresponds to a speculative demand and a hedging demand.
In general, the size and sign of a hedging demand depend on risk aversion and horizon and, thus, will be different for different investors.
Thus, if hedging demand is concentrated on the short side, market makers offer a futures price at a discount to the expected future spot price.