Equity Portfolio Hedging
A pension fund manager calculates how many S&P 500 futures contracts are needed to protect a $50M equity portfolio from market downturns.
Commodity Price Protection
A grain exporter determines the proportion of wheat futures contracts to hedge against price fluctuations on future crop sales.
Bond Portfolio Risk Management
A fixed-income fund manager calculates Treasury futures contracts needed to protect bond portfolio value from interest rate increases.
Energy Producer Hedging
An oil production company sizes its crude oil futures position to offset price risk on proven oil reserves.