We formulate an optimal hedging problem of Bitcoin inverse futures under the minimumvariance framework. We obtain the … optimal hedging strategy in closed forms for both short and long hedges, and compute hedging efficiency under the optimal … strategy. Our empirical studies show that the optimal hedging strategy achieves superior effectiveness in reducing risk and …

Extant theories suggest that managers may use hedging either to alleviate underinvestment problems caused by costly … investigate this issue using a hand-collected dataset of hedging and investment behavior of oil and gas exploration and production … firms. We do not find evidence that hedging alleviates underinvestment problems. However, we do find a strong positive …

Major airlines rely on fuel hedging to manage risk of volatile fuel prices. We show that fuel hedging leads to lump sum … heterogeneous fuel hedging outcomes) lead to significant differences in ticket prices. In particular, a 10% reduction in the … reported fuel cost (due to hedging gain) leads to a 2.2% reduction in ticket prices. We conduct several robustness checks, and …

successful in reducing capital requirements. Indeed the proposed local hedging scheme benefits from a higher exposure to equity …

This article analyzes the importance of supply-side fluctuations for corporate hedging. To establish a causal link, we … Safe Harbor Reform of 2005. Following the reform-induced expansion in the availability of derivatives, fuel hedging by … financially sound airlines. Similarly, we find that the hedging propensity increased in a general sample of non-financial firms …

light on this central question in corporate hedging theory. We use hand-collected data from the oil and gas industry that …-based theories of risk management. We document a broad absolute decrease in the use of hedging and a significant relative decrease in … hedging in financially constrained firms …

Local and global quadratic hedging are alternatives to delta hedging that more appropriately address the hedging …) the value added of global over local quadratic hedging, (ii) the importance of the choice of measure (real-world or risk …-neutral) when implementing quadratic hedging, and (iii) the robustness of quadratic hedging to model mis-specification. We find that …

cause dynamic hedging to fail. As an alternative, we investigate a quasi-static hedge of Parisian options under a more … contingent claims which are statically hedged. Through numerical experiments, we show the effectiveness of the suggested hedging …

We exploit an exogenous change in basis risk in the oil and gas industry to analyze the channels through which hedging …-order channels through which hedging affects firm value …

I incorporate the choice of hedging instrument into a moral hazard model to study the impact of derivatives on a firm …'s value. A hedging instrument creates value by minimizing the expected costs of distress. In the model, managers who exert … as a hedge. I show that the optimal hedging instrument maximizes the firm's value but does not reduce the noise in the …