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Hedging in .NET Integrating barcode 3/9 in .NET Hedging




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Hedging use .net framework 3 of 9 implementation todraw barcode 3/9 for .net iPhone OS 1. A company owns (or e 3 of 9 barcode for .NET xpects soon to own) an asset which it intends to sell, at the current market price, in two months time.

The company is exposed to risk through the possibility of a fall, over the following two months, in the value of the asset. 2. A second company expects to buy an asset in three months time, the price being the market price on the day of purchase.

This company is exposed to risk from a rising market. Hedging is the process of neutralising risk or at least reducing the risk in a nancial contract. By entering a futures contract which makes a gain in precisely the circumstances where the risky contract will make a loss, the hedger is neutralising (reducing) the risk inherent in the original contract.

. Example 3 Today is 14 May and the Visual Studio .NET Code 3 of 9 spot price of gold is $296 per troy oz. A company expects to receive on or shortly before 30 July (in settlement of an account) 500 troy oz of gold.

The company wants to sell the gold, in the open market, as soon as it is received. The company is exposed to risk through a possible fall in the price of gold. If it enters, today, a short futures contract (to sell gold) and the price of gold does fall, the company will make a loss from the sale of the gold but make a gain from the futures contract.

If, however, the price of gold. The futures market rises, it will make a p 3 of 9 barcode for .NET ro t from the sale of the gold and a loss from the futures contract. We show how this strategy can be used to remove (or lessen) the risk from a falling market and provide the company, today, with an approximate price it will receive from the sale of the gold.

Futures contracts in gold are available for any delivery month on the NYME (Comex Division). Each contract is for 100 troy oz. The price (per troy oz) for an August futures contract in gold is $299.

The company enters ve short August futures contracts, which it closes out on the day the gold is sold. (Since this day is likely to be late in July, an August futures contract is used for the hedge.) We show now that this strategy will guarantee the company a price of approximately $299 per troy oz.

On 30 July: There are two possibilities. (i) The spot price on 30 July is greater than or equal to $299. Suppose the spot price on this day is $301.

Since, at maturity, the spot price and the futures price converge, the closing out price on the futures contracts should be approximately $301. Since the futures contracts are to sell for $299, the company loses $(301 299) per troy oz on the futures contracts. From the sale of its gold, the company receives $301 per troy oz.

Hence the company achieves (approximately) $301 $(301 299) = $299 per troy oz. (ii) The spot price on 30 July is less than $299. Suppose the spot price on 30 July is $290.

The closing out price on the futures contracts should be approximately $290, so the company makes a pro t of $(299 290) per troy oz from the futures contracts. From the sale of its gold, the company realises $290 per troy oz. Hence, overall the company achieves (approximately) $290 + $(299 290) = $299 per troy oz.

The aim has been to balance (or hedge) a loss in one contract by a gain in the other and as the arithmetic shows, this has been successful. By such means, the company has been able to realise a price that was known on 14 May. By this means, the uncertainty associated with this deal has been reduced considerably.

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