A Note on Dual Hedging

Donald Lien
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Donald Lien: Department of Economics, University of Texas-San Antonio, U.S.A.

International Journal of Business and Economics, 2004, vol. 3, issue 1, 29-34

Abstract: Under current Internal Revenue Services guidelines, gains from futures contracts serving price (quantity) risk management purposes are treated as ordinary (capital) income. This paper finds that, although dual hedging opportunities are available, the asymmetric tax treatment prevents firms from trading "quantity" futures contracts.

Keywords: dual hedging; ordinary income; capital income (search for similar items in EconPapers)
JEL-codes: G11 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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