Since the collapse of the Metallgesellschaft AG due to hedging losses in 1993, energy practitioners have been concerned … hedging long-dated futures and options with their short-dated counterparts, we find that the long-term tracking errors are, on …

methodology. The study shows that hedging effectiveness improves in cross hedging and composite hedging …

A new measure of hedging pressure in commodity options markets—commercial hedgers’ net short option exposure … values of option hedging pressure are greater. This pattern is consistent with commercial traders’ natural hedging motives. A … consideration of margin requirements. Overall, our results confirm the existence of hedging premiums, demand effects, and limits to …