Pre-hedging, or anticipatory hedging, is one of many risk management tools often used in principal-based OTC markets, such as commodities, foreign exchange (FX), or interest rate swap.
Structured products have come a long way. From a specialised, exotic investment tool, they are now mainstream, and financial advisers are now more comfortable about investing in them on behalf of clients.
Commodity Futures Trading Commission CFTC enforcement actions pre hedging large commodity trades foreign exchange FX, interest rate swaps Trading by broker dealer to hedge their risk or a market manipulation European Securities Markets Authority also looking at pre hedging trades