Discussion On Enterprises Use Finances Derivatives For Hedging

Financial derivatives produced since the 20 th century,they quickly made significant progress on a global scale,especially in recent years,continued financial innovation,financial derivatives,international financial markets have become an important part of its financial companies,non-financial companies risk management and other investors,providing an effective tool;at the same time,because of the different risk management needs,the use of different financial derivatives enterprise value of the company have different effects,which also invest in companies providing financing and other financial management new tools.Especially in recent years,China's foreign trade to further strengthen trade import and export volume increased significantly,domestic companies dependence on international raw materials and bulk materials is increasing,so many of our companies have to face the international prices of raw materials and financial markets in particular many aspects of risk foreign exchange market,and thus more companies choose to use financial derivatives to hedge market risk,prevent and resolve financial crises.Furthermore,with the rapid development of China's economy,the state restrictions on financial derivatives business of gradual liberalization,the impact of macro-financial derivatives market and its role in the financial management of increasingly microscopic manifestation will become the company's financial management an important tool,thus strengthening research on financial derivatives companies use is particularly important.N Based on this,the motivation of the use of financial derivatives and their impact on risk management and enterprise value to conduct a literature review,so researchers can quickly grasp the future research in financial derivatives,financial derivatives understanding of research in our country insufficient,thereby depth exploration and improvement.This paper introduces the derivatives and hedging,meaning,at its theoretical basis introduced hedging classification,will be summarized into producers,operators,processors,three different types of hedging and there may be introduced in the course of hedging the risk point of view.In financial risk management theory,hedging process as the starting point,discusses the basic stages of the process and the possible methods of hedging the company's operating results and financial condition,liquidity and stock price impact generated.Then,combined with Jiangxi Copper hedging motives and means,we targeted analysis of Jiangxi Copper hedging risk in the process.And analyzed the Jiangxi Copper Hedging stage,mainly based on copper pole sales cycle hedging strategies,measures by hedging part of the copper raw material procurement,and a method for copper stocks this part of hedging hedging three processes,analyzes changes in Jiangxi copper Jiangxi copper results of operations and financial condition,liquidity and share price after using financial derivatives to hedge,Jiangxi copper was found after using hedging and no obvious indicators improved.Finally the JCC use financial derivatives to hedge the effect is not significant for three reasons: the lack of clarity on the purpose of hedging,derivatives class selection problems and risk management objectives errors.Finally,after analysis of the case,the paper has been the case with respect to hedging revelation:(1)the right vision is prerequisite for successful hedging;(2)smooth business processes successfully hedge to provide protection;(3)for enterprises hedging hedging design is the key to success.Hedging regulatory measures:(1)a clear business purpose involved in derivatives trading;(2)a reasonable choice of the type of use of derivatives;(3)standardize risk management objectives and identify issues and risk management.