Study On Hedging Of Soybean In China

Along with deepening of economy globalization, the size of corporationsmanagement is expanding. So corporations will be faced with more queasyenvironment of exterior market and endure two market risk product market andelement market at the same time.The emergence of futures market is in order to caterfor the wish of evading risk. wish The way of evading risk is entering into futuresmarket and go along hedging. As to hedging lots of scholars made in-depth studiesbut these studies didn't take trading costs into account. It deviated form the practice ofcorporation's hedging. This is the great background of the study and the point wheredemonstration and theoretical meaning are incarnated.Structurally, the article is composed of six chapter. The emphasis of the article isdemonstration study of hedging. After introducing the relative theories of hedging, theway of ensuring the ratio of futures hedge is emphasized. Finally it goes along withthe demonstration analysis of hedging based on taking trading cost into account or notand calculating the optimal hedge ratios on the least risk through historical dates. Thefinal aim of the article is pointing out the feasible strategy of hedging for relativesoybean corporations. The main point of the article's innovation is bringing out thedecided way of the hedge ratio based on considering trading costs, especially bringforward the questions that corporations should be aware of for the practice of thesoybean corporations in China.