Hedge Ratio Calculator
Results are estimates based on the values you enter. Recheck your inputs and assumptions before using the output for decisions.
Calculate hedge ratio from hedge position value and total exposure value.
Hedge Ratio Calculator
Free online hedge ratio calculator to measure how much of a financial or business exposure is covered by a hedge position. This calculator is useful for investors, treasury teams, commodity users, importers, exporters, risk managers, students, and analysts who want a quick way to see what portion of an exposure has been hedged. Hedge ratio is an important risk-management measure because it shows whether the hedge is small, partial, or close to full coverage. This page gives a practical way to compare hedge size with total exposure using simple money values.
This calculator uses two inputs. Hedge position value means the size of the hedge put in place, such as a futures, forward, options, or offsetting asset position measured in value terms. Total exposure value means the value of the risk exposure you want to protect. Once those values are entered, the calculator shows hedge ratio, unhedged exposure, hedge value per $100 exposure, and remaining exposure percent. These outputs make it easier to interpret whether the hedge covers a small share, a large share, or nearly all of the underlying risk.
The formula of hedge ratio
Hedge ratio = Hedge position value / Total exposure value
Unhedged exposure = Total exposure value – Hedge position value
Hedge value per $100 exposure = Hedge ratio x 100
Remaining exposure percent = Unhedged exposure / Total exposure value
Here hedge position value means the money value of the hedge used to offset risk, total exposure value means the money value exposed to price, rate, or market movement, hedge ratio means the proportion of exposure covered by the hedge, unhedged exposure means the portion still open after hedging, and remaining exposure percent means the share of the original exposure that is still not covered.
Solved Example
Example 1: Find the hedge ratio if hedge position value is $50,000 and total exposure value is $200,000.
Solve: Hedge ratio = 50000 / 200000 = 0.25 = 25.00%
Unhedged exposure = 200000 – 50000 = $150,000
Hedge value per $100 exposure = 0.25 x 100 = $25
Remaining exposure percent = 150000 / 200000 = 75.00%
Example 2: Find the result if hedge position value is $120,000 and total exposure value is $150,000.
Solve: Hedge ratio = 120000 / 150000 = 0.80 = 80.00%
Unhedged exposure = 150000 – 120000 = $30,000
Hedge value per $100 exposure = $80
Remaining exposure percent = 20.00%
Example 3: Find the result if hedge position value is $180,000 and total exposure value is $240,000.
Solve: Hedge ratio = 180000 / 240000 = 0.75 = 75.00%
Unhedged exposure = 240000 – 180000 = $60,000
Hedge value per $100 exposure = $75
Remaining exposure percent = 25.00%
Table of hedge ratio calculator
| Hedge Position | Exposure Value | Hedge Ratio | Unhedged Exposure |
|---|---|---|---|
| $50,000 | $200,000 | 25.00% | $150,000 |
| $120,000 | $150,000 | 80.00% | $30,000 |
| $180,000 | $240,000 | 75.00% | $60,000 |
| $300,000 | $400,000 | 75.00% | $100,000 |
How to use this hedge ratio calculator
Enter the hedge position value in the proper input field. After that, enter the total exposure value you want to compare with the hedge. Then click the calculate button. The calculator will show hedge ratio, unhedged exposure, hedge value per $100 exposure, and remaining exposure percent in the result box.
This calculator is useful when reviewing whether a hedge is too small, too large, or close to the intended level of coverage. A low hedge ratio means a large portion of the exposure is still open. A higher hedge ratio means more of the risk has been offset. Looking at unhedged exposure beside the hedge ratio helps translate the percentage into a dollar amount that can be easier to discuss in treasury, trading, procurement, or portfolio settings.
When using the result, remember that hedge ratio alone does not guarantee perfect risk reduction. Basis risk, timing differences, contract mismatch, correlation, and position sizing details can all affect real-world hedge performance. Even so, hedge ratio remains one of the clearest first-pass indicators of coverage level. This calculator gives a fast numerical view that supports hedging analysis, classroom learning, position review, and basic risk-management planning.