Hedge is a risk management strategy used in limiting or offsetting probability of loss from fluctuations in the prices of commodities, currencies, or securities. In effect, hedging is a transfer of risk without buying insurance policies.
Hedging employs various techniques but, basically, involves taking equal and opposite positions in two different markets (such as cash and futures markets). Hedging is used also in protecting one's capital against effects of inflation through investing in in high-yield financial instuments (bonds, notes, shares) , real estate or prescious metals.
Hedging employs various techniques but, basically, involves taking equal and opposite positions in two different markets (such as cash and futures markets). Hedging is used also in protecting one's capital against effects of inflation through investing in in high-yield financial instuments (bonds, notes, shares) , real estate or prescious metals.
Two recent arbitral decisions have challenged this view by finding that two of the energy trade's essential components—oil price hedging instruments and bareboat charter-party operations—contributed to the requirements to what constituted a protected investment under the applicable bilateral investment treaties and Article 25(1) of the ICSID Convention:
See
Deutsche Bank v. Sri Lanka
Inmaris v. Ukraine
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