Layered Hedging Strategy

Layered Hedging refers to the strategy of:

Strategic Layered Hedging is predicated on the belief that in an unpredictable market, the best approach is to make purchases of small amounts of energy over time (Dollar-cost averaging), which limits exposure to the highs and capitalizes on the lows, mitigates risks, reduces volatility, and increases budget certainty. It takes advantage of the numerous purchasing options available, provides the flexibility needed to leverage market volatility, and can be customized for each location. It requires daily market involvement, and sophisticated software to identify market opportunities and manage the multiple hedges for each client.

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Annual Layered Hedging

Monthly Layered Hedging

Layered Hedging mitigates risks, reduces volatility, increases budget certainty and stability, and reduces energy expenditures.

Annual Layers (available only through the graphic header, per current)

Annual Layers is a strategy in which energy is bought incrementally over time until each account is fully hedged to the client’s desired level. Each layer (strip) is comprised of a certain percentage of expected annual energy usage and can extend to projected usage over several years.

Monthly Layers (available only through the green bar under the graphic, per current)

Monthly layered hedging is a finely tuned strategy in which the % hedged will differ from month to month. This strategy involves identifying specific monthly pricing opportunities, rather than simply the weighted average of an annual strip.  Executing this strategy requires a great deal of effort and is most suitable for larger accounts with high monthly volumes.