Hedging using futures contracts It is not perfect There may be a difference between the hedged asset and the asset underlying the futures contracts You do not know the date when the asset will be purchased or sold Mismatch between the expiration date and the date when the asset will be bought or sold Charles cao9 Charles Cao Hedging Using Futures Contracts ◼ It is not perfect: ◼ There may be a difference between the hedged asset and the asset underlying the futures contracts ◼ You do not know the date when the asset will be purchased or sold ◼ Mismatch between the expiration date and the date when the asset will be bought or sold