Keywords
derivatives
hedging
stock market
infrastructure
futures
swaps
options
How to Cite
Abstract
The article focuses on the effectiveness of using derivatives as financial risk hedging instruments in the context of exchange activities. The article focuses on the analysis of the effectiveness of using exchange derivatives as financial risk hedging instruments and the role of exchange infrastructure in ensuring the reliability of such operations. This research aims to evaluate the effectiveness of utilizing derivatives to mitigate financial risks in the setting of exchange activities and to pinpoint areas to improve the efficacy of such tools in Ukraine. During the scientific investigation, general scientific methods of cognition were employed, specifically, comparative analysis, the economic and statistical approach, a systematic method, and the graphical approach. The findings of the study demonstrate that utilizing derivatives as hedging tools in the stock market substantially lessens the financial perils faced by businesses and financial establishments, bolstering the steadiness of their processes. Meanwhile, the efficacy of hedging is contingent on exchange infrastructure advancement, the liquidity of derivative instruments, and market regulation levels, which need to be refined for broader and more impactful derivative usage in Ukraine. Key derivative types are recognized. The essence and categorization of financial risks and methods for hedging financial risks using derivatives are explored. The characteristics of derivative operations on financial exchanges are outlined. The parts of the exchange infrastructure that guarantee effective hedging and the primary varieties of derivatives utilized in exchange trading are indicated. The trading volume in derivatives during January-December 2020–2024 and by trade organizers is examined. The causes and results of alterations in the Ukrainian derivatives market in 2024 are identified. A comparative analysis of hedging practices on exchanges in Ukraine and the world is performed. The main challenges and limitations in the application of derivatives in Ukraine are emphasized. Methods to enhance the effectiveness of risk hedging with derivatives are suggested.
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