Layered Hedging – Annual Layers

Annual Layers refers to a strategy in which energy is bought incrementally over a period of time until each account is hedged to the client’s desired level. Each layer (strip) is comprised of a certain percentage of expected annual energy usage. Each layer may include several years, and the percent hedged may vary from one year to another, but this strategy keeps the proportion of hedged energy the same across all months of each year. This strategy simplifies the hedges and is appropriate for mid-size clients.