|
Abstract:
|
Possessing the knowledge to hedge energy price risks properly is essential and crucial for running a long -term business . In the past , many hedging instruments have been invented and widely used . By using these derivatives , decision makers reduce the price risk to a certain degree .
To apply these hedging instruments to the perfect hedging strategies correctly , it is necessary to be familiar with these tools in the first place . This work introduces the financial tools widely applied in hedging , including forward contracts , futures , swaps and options . It also introduces the hedging strategies used on energy hedging . Since individuals are creating strategies according to their unique risk appetite and collected information , this work presents three risk appetites and a method of distinguishing valuable information .
With the contribution of this thesis , future works can be done in the field that connect the information valuation and energy hedging by changing the behavior in each risk appetites’ hedging ratio . |