Abstract

Futures are a relatively new financial instrument in modern times and play a pivotal role in the economy. Stock index futures, as a hedging tool for the stock market, have become even more popular among investors in this particular period of multinational trade friction. However, everything has its pros and cons, and to gain extra income you must first bear the corresponding risk, so the purpose of this paper is to introduce stock index futures hedging and its risk management, to analyze and explain the operation and risk of hedging, and to empirically test the analysis and application of the hedging strategy, thus providing a theoretical reference for investors' practical operation.

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