COMPREHENSIVE ANALYSIS OF HEDGING TECHNIQUES IN THE INDIAN STOCK MARKET: STRATEGIES, APPLICATIONS, AND EFFECTIVENESS WITH REFERENCE TO HDFC

Risks associated with unfavourable price changes in assets, obligations, or investments may be mitigated or eliminated via the employment of hedging measures. Investors, traders, and organisations use hedging strategies to mitigate risks related to interest rate, currency exchange rate, commodity price, and stock market changes. Futures, options, forward contracts, and swaps are some of the contemporary and more conventional hedging mechanisms that have been the subject of this study. The research also looks at how hedging is used in the real world in areas such as agriculture, finance, energy, and foreign commerce. It focusses on the fact that hedging is used by businesses and portfolio managers to protect themselves from possible losses caused by market volatility, rather than to generate a profit. Important ideas including cost-benefit analysis of hedging techniques, basis risk, and perfect vs. imperfect hedges are also covered. According to the results, sound hedging practices improve both financial security and the capacity to make decisions in the face of uncertainty. In today's volatile and uncertain financial climate, the research found that risk management and long-term value preservation need knowledge of and practice with suitable hedging strategies.