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Hedging

Historically, the term ‘’hedging’’ comes from the concept of growing a hedge to enclose an area or provide a protective barrier.

However, in financial trading, hedging means to

 ‘’protect or insure against price fluctuations or financial losses’’.


HEDGING USING FUTURES


Through trading Futures, businesses are better able to navigate risk and uncertainty. Futures enable companies to plan for predictable prices, therefore companies:

  • are better equipped to take on new opportunities,
  • can act more quickly and decisively, and 
  • grow their businesses   

The end result, is that Futures ultimately help reduce costs and provide certainty for you, the client.

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For example:

If you are a producer, you could sell a futures contract on your product to protect yourself against declining market prices.

Or, if you are a consumer, you could purchase a futures contract to gain price certainty from your supplier in order to accurately forecast your costs for the year ahead. 

 

BENEFITS OF USING FUTURES TO HEDGE

Companies and individuals go to the futures exchange to buy and sell commodities and financial products. Their key objective is to remove risk from their business or make profit as an investor when prices fluctuate.

Unfortunately, you can’t tell the future.

However by trading with derivatives like futures and options you are better able to protect your goals, especially if prices move in the wrong direction, thereby mitigating your risk.

 

INTREPID CAPITAL AND HEDGING

Intrepid Capital’s vast market knowledge and experience in global capital markets makes us the clear choice if you are looking for a firm to manage your financial exposure in both SA and across the African continent.

We assist both individuals and corporates to hedge their currency, equity, commodity or interest exposure. Our belief is that our clients should focus on their core business, rather than speculating. Intrepid Capital helps you to create the most cost effective, flexible and efficient hedge in the following financial instruments and commodities:

  • Equity
  • Currency
  • Interest Rates
  • Agricultural Products
  • Global Commodities