What is ‘Hedge Clause’
A provision included in published financial reports that indemnifies the author, or authors, against any responsibility for any errors, omissions, or oversights contained within the report. Hedge clauses can be found predominately in analyst reports, company press releases and on most investing websites.
A hedge clause is also known as a “disclaimer”.
Explaining ‘Hedge Clause’
Investors will find hedge clauses in nearly every financial report published today, and even though they are often glossed over, they are very important for investors to read and understand.
One example is the “safe harbor” provision found in most company press releases. Potential conflicts of interest from, for example, a stock analyst writing a recommendation for one of his own holdings, must also be included in the hedge clause for that report.
Further Reading
- Economic exposure to exchange rate risk and financial hedging – www.emerald.com [PDF]
- Natural hedging as a risk prophylaxis and supplier financing instrument in automotive supply chains – www.emerald.com [PDF]
- Hedge funds and the collapse of long-term capital management – www.aeaweb.org [PDF]
- Is cash negative debt? A hedging perspective on corporate financial policies – www.sciencedirect.com [PDF]
- The economics of hedge funds – www.sciencedirect.com [PDF]
- Hedge funds: Past, present, and future – www.aeaweb.org [PDF]
- Overview and Regulation of Hedge Funds – search.proquest.com [PDF]
- Foreign currency risk hedging – search.proquest.com [PDF]
- Risk management for air freight forwarders: Analysis of flexible price agreements and financial hedging – www.tandfonline.com [PDF]
