Applying Financial Derivatives To Manage Market Risk In Company A

With the development of marketization and globalization,enterprises are facing more and more uncertain factors in production and management activities,and major uncertain factors will be reflected through market price fluctuations.Since 2012,global commodity prices have seen dramatic fluctuations,many enterprises,including state-owned enterprises and private enterprises have been experiencing difficulties even collapse.Market price volatility risk is one of most important risks that the enterprise are facing in the background of globalization.Taking company A as an example and combining hedging theory with existing practices of agricultural products derivatives market,this paper explores the market risk,analyzes the problems,and then analyzes the market risk of a company in the process of production and management,and ultimately the problems in market risk management.Finally,this paper provides the implementation measures of enterprise market risk management,including professional financial talent and good enterprise risk management system.The use of financial derivatives will magnify the market risk.On the other hand,inperfect and unsound financial derivatives trading market tend to lead to unsafe and inefficient hedging.using high-end financial instruments,such as futures and options to hedge and management market risk is the inevitable trend,in conclusion,enterprises need to control risk by taking practical and effective action.