The rise of mechanistic hedging

Utility hedging gains wider acceptance, but companies still need to work harder to eliminate pure price-view hedging, writes Leigh Parkinson of RiskAdvisory

While more utilities are adopting hedging practices, there is little agreement in the industry about how hedging should be implemented, and who should decide the programme's shape and ultimate objectives. Ask someone in the utility industry about their views on hedging and you are likely to get a wide range of answers and opinions, especially in the current environment of wildly fluctuating commodity prices and new, non-traditional energy speculators, such as hedge funds, in the markets. Akin to

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