Natural gas hedging is a financial strategy used to protect against the volatility of natural gas prices. This comprehensive guide covers what natural gas hedging is, why it is essential, and the basic mechanisms involved. Businesses and investors use various strategies and instruments like futures, options, and swaps to manage risks and ensure stable cash flows. Understanding the fundamentals of hedging helps companies mitigate potential losses and capitalize on price movements. By implementing effective hedging strategies, firms can achieve financial stability and operational efficiency. This article provides a foundational understanding of natural gas hedging, its benefits, and associated risks.