What this chapter is about

This chapter provides an overview of the many different places where companies can buy and sell and restructure risk. Of course, this includes futures and options markets. But a focus on derivatives markets is far too narrow for a comprehensive view of risk. Companies sell and restructure risk whenever they purchase insurance. And the normal contracts and business relationships that companies enter into day-to-day determine the risks the companies assume and the risks they assign to others. When a company organizes the supply chaing for key product lines it establishes the risks it will assume. And when a company selects its niche in a larger value chain, it is selecting the risks it will take on and the risks it will leave to others. These are all different locations for the management of corporate risk.

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