Whitepaper: How to Optimize Hedging
Reduce Hedging Costs, Improve Risk Management & Margins
“This Whitepaper presents a Hedge Framework that is far more robust and flexible than other available hedge models and allows companies to improve their margins by reducing hedging costs, without compromising on their Risk Management practices.”
Hedging in Oil Refining business has been a perennial problem for practitioners. Managers often have to choose between better margins and risk management and are constantly on the look-out for better hedge models to accomplish this feat. Academicians too have pitched in with many models from time to time showing variations / better results than existing models.
Studies have shown that Hedging Costs are often under-estimated by considering only Direct Costs (Brokerage, Bid-Ask Spread). However, Indirect Costs (Cost of Lost Upside, Opportunity cost of Margin Capital) can be far greater. In fact, when considered together, hedging costs can form up to 10% of total costs.
This Whitepaper: How to Optimize Hedging, looks at a new way of optimizing Hedging. While the Hedging model presented here can be adopted for various industries, the paper focuses specifically on applying this model to Oil Refining Businesses.
“Whitepapers don’t have to be boring. That’s why diverging from the traditional ways, this Whitepaper is delivered in a beautiful presentation format. What’s more, most of the findings are expressed as charts and graphs for easy understanding. By all measures, this Whitepaper is really One of its kind.”
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