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 …

their longer term needs for hedging and speculation. We also find that the imbalance in demand and supply in the market can …

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 …

results support our model. In particular, they show that the derivative hedge theory is important for the explanation of the …We develop a model of the illiquidity transmission from spot to futures markets that formalizes the derivative hedge … theory proposed by Cho and Engle (1999). The model shows that spot market illiquidity does not translate one-to-one to the …

We develop a model of illiquidity transmission from spot to futures markets that formalizes the derivative hedge theory … support our model and show that the derivative hedge theory provides an explanation for the liquidity link between spot and …