FINANCIAL DERIVATIVES AS HEDGING INSTRUMENTS

Abstract

Financial derivatives are strategic tools for risk management in Mexican companies exposed to volatility in the peso-dollar exchange rate, interest rates, and commodity prices. Without adequate protection instruments, these companies remain vulnerable to non-operational losses that hinder financial planning. This documentary research analyzes the relevance of derivatives as hedging mechanisms in the Mexican context, examining forwards, swaps, options and futures. Cases of Mexican companies such as Bimbo, Grupo Modelo, Herdez and Autlán that successfully used derivatives to protect cash flows are analyzed. The results show that companies with hedging strategies reduce loan spreads by 50- 60 basis points and present valuations 6.7-7.8% higher compared to companies without hedging. However, the global financial crisis demonstrated risks of speculative use. Key determinants for adoption include company size, leverage, international exposure and financial sophistication. It is concluded that derivatives are essential for corporate competitiveness, provided they are implemented under disciplined policies supervised by the CNBV and in accordance with NIF C-10.