Spring Forward Gold Hedging Transactions The Group Risk Management

Chunyu corp. took up hedge trading use Gold Forward in Bank of China since year 07, but exposed many problems. In order to help Chunyu corp. build up scientific ways to manage It's trading, we research the problem in the way commercial banks used to do, combining the modern hedge theory and methods.In this article, we discuss the traditional hedge theory, especially the ways to use speculation, the methods of how to use VAR to find the trend of the gold's price, and how to measure the risk. We draw the conclusion that keep the position of speculation will be more suitable for the company. We point out the typical shortcomings in the hedge management in the company, they should build up more efficient system to improve the management of hedge trading, build up the system of management, definitude the duty of trading, optimize the way of made decision so as to avoid the risk, criterion the progress of trading, avoid the risk of operation, monitor the trading close and to setup specific dealer team.It's a test for the modern commercial banks to control the client's managing risk through the way to increase the risk management of the customer. And we hope Chunyu corp. could be a sample for the other company to abstract experience.