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Economic Thought and Practice, Vol. 16 No. 1, 2007.

Review article

OPTIONS HEDGING AS A MEAN OF PRICE RISK ELIMINATION

Tonći Lazibat
Tomislav Baković

Full text: english pdf 258 Kb

page 63-78

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Abstract

Price risk can be considered one of most important risks most foreign trade companies face. From this aspect use of modern futures markets can be considered a basic precondition for the survival of most businesses. For the purpose of insurance hedging has been in use for more than a century, but still its forms have evolved over time. On the other hand options can be considered the most sophisticated instrument futures trade can offer at this point. The aim of this paper is to present how options, which are normally considered a main tool for speculation, can successfully be used as a tool for price risk elimination.

Keywords

hedging; price risk; options; futures markets

Hrčak ID:

16087

URI

https://hrcak.srce.hr/16087

Publication date:

19.7.2007.

Article data in other languages: croatian

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