“100% Hedged” vs. “Risk Free”: Understanding the Difference

“100% Hedged” vs. “Risk Free”: Understanding the Difference

Any energy market participant realizes that uncertainty in future prices of electricity and fossil fuels means risk exposure for their portfolio. Extreme weather, new government regulations, or changes in global supply dynamics can quickly erode profits or even spell ultimate disaster for companies on the wrong side of the resulting price swings. Rather than leaving their portfolio exposed to today’s highly volatile energy market, portfolio …