The application of derivatives in risk management of Manufacturing SMEs in China

Abstract

As an important risk management tool, derivatives are widely used by enterprises all over the world. However, by combing and studying relevant literature and combining with the actual situation, it can be seen that there are still some problems in the process of risk management in the use of derivatives in China's Manufacturing SMEs, such as imperfect risk management system, single tool selection, excessive hedging or speculation. In order to give full play to the positive role of derivatives, enterprises should improve their internal system, apply financial instruments flexibly and comprehensively, find the appropriate combination of derivatives production and reasonable hedging, so as to promote the stable development of enterprises.