The Perspective Of Developing Dynamic Hedging On The Russian Forward Market

About the author:

Yuliya V. Borodatch,

Abstract:

The article discusses the current trends in the development of the domestic market of exchange-traded derivatives, as well as the possibilities and problems of development of hedging in the real sector of the Russian economy. Occurrence and large-scale development of the derivatives market is dictated by the need to protect businesses from financial risks posed by various internal and external factors. The Russian market for Exchange-traded derivatives in terms of its development is inferior, and on a number of options ahead of the futures markets of developed and leading in terms of growth rate of developing countries in the Asia-Pacific region. Despite this in the domestic futures market key players for two decades remain speculators and massive hedging request never was formed. The article discusses the major challenges to the development of dynamic hedging in our country. Firstly, the influence of participants, including the organizers of trades, on the intensity of trade in futures contracts and to motivate risk managers. In particular, approximately 98% of the speed of the Russian derivatives market segment accounts for financial derivatives, while the main demand of hedgers focuses on commodity derivatives market. Secondly, the mechanism for the operation of the futures market and the impact of risk on the effectiveness of the operations base for risk hedging of an investment portfolio. In addition, issues of ownership of the company’s capital structure in selecting risk management techniques and tools for structuring cash flows.

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