This article first appeared in Profit & Loss. It was written by Ken Monahan, Greenwich Associates, specifically for Bloomberg. Corporations are among the most important customers of FX trading desks.

FAZ is born with the objective of making -300% of the daily performance (and I emphasize daily) of the Financial Select Sector Index (IXMTR). This makes it a tactical trading and hedging instrument in ...

ProShares Short Dow30 ETF is a popular instrument for shorting the Dow Jones Index. The DOG ETF seeks daily results that correspond to the inverse performance of the Dow Jones Industrial Average. DOG ...

Companies often try to protect their assets from various risks in a process known as hedging. Think of hedging as being similar to buying auto insurance. When you're out driving your car, there is a ...

A detailed analysis examines various methods to protect investments when market downturns occur. The article reviews several techniques and provides insight into how each strategy works. Investors can ...

A fair value hedge protects against a change in fair value of a recognized asset or liability or of an unrecognized firm commitment attributable to a particular risk. The characteristics of a fair ...

A survey of the 30 largest public oil and gas companies and their hedging activities as disclosed in their December 21, 2021 10-K filings. Hedging remains a mainstay activity for many oil and gas ...

Basis risk refers to the potential mismatch between the value of an asset or liability and the financial instrument used to hedge or manage its risk. This divergence can result in unexpected gains or ...

Translation risk is the foreign exchange risk associated with the translation of net investments in foreign operations into a group’s presentation currency when preparing consolidated financial ...

The Financial Accounting Standards Board has released its long-awaited hedging standard, the final component of its financial instruments convergence project with the International Accounting ...