Strategies for Hedging Risks Using Futures Contracts

The paper presents a study of the most effective risk hedging strategies using futures contracts. The work focuses on the most suitable strategies for hedging market risks. The financial market has become more volatile and unstable. The frequency of unexpected changes in the markets has increased, leading to negative consequences for companies and private investors. Therefore, participants of the financial market should pay special attention to management of market risks, namely such aspects as stabilization cash flow for the company or maintaining the value of the investor’s portfolio. There are several ways to solve these tasks, for example, insurance or asset and liability management, but hedging is the most interesting and relevant of them. Hedging allows effectively control of risk both on a single position and on the portfolio as a whole. But in order to implement a hedge, it is necessary to understand the advantages and disadvantages of various hedging strategies. he practical significance of this work is that the evidence and arguments of the advantages of a hedging strategy for each type of investor are given so that in the future it can be used to solve real financial problems.