Hedging Against Rising Lead Prices using Lead Futures

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Beginners’ guide to hedging strategies

Hedging is the practice of strategically opening new positions to protect existing positions from unpredictable market movements. Discover why hedging is such a popular strategy and the different ways that you can hedge.

What is hedging?

Hedging is the practice of holding two or more positions at the same time with the intent of offsetting any losses from the first position with gains from the other. At the very least, hedging can prevent a loss from going beyond a known amount.

In fact, you might’ve hedged and not even known about it as people hedge in everyday life as well as on financial markets. For example, people view insurance as hedging against future scenarios – as hedging will not prevent an incident occurring, but it can protect you if the worst should happen.

Typically, hedging is a risk management strategy used by short to mid-term traders and investors to protect against unfavourable market movements. Many long-term investors never use hedging as they tend to ignore short-term fluctuations altogether, but it is still important to learn about the process because it can have a range of different applications.

Why do traders hedge?

Traders might hedge their positions for a number of reasons; whether it’s to protect their trades, their investment portfolio or are looking to combat currency risk. It’s important to understand that when traders hedge, they do so not as a means of generating profit but as a way of minimising loss. All trading involves risk because there is no way to prevent the market moving against your position, but a successful hedging strategy can minimise the amount you would lose.

By way of example, here are four common reasons that traders choose to hedge. In no particular order, these are:

Avoiding volatility risk on forex positions

For some, the allure of trading forex is that it’s incredibly volatile and fast paced, but for others, there is a desire to reduce excessive risk where possible. While many traders will minimise their risk by attaching stop-losses, there are some that choose to use forex hedging strategies. These include:

  • Simple forex hedging, which involves taking a long position and a short position on the same currency pair
  • Multiple currency hedging, which involves selecting two currency pairs that are positively correlated, and taking positions on both pairs but in opposite directions
  • Forex options hedging, which gives the holder the right, but not the obligation, to exchange a currency pair at a set price on a specific future date

Avoiding liquidating shareholdings

Although investors tend to focus on longer-term market movements, some will hedge against periods of economic downturn and volatility, as opposed to liquidating a shareholding.

As an investor, it’s also important to understand the process of hedging because it is a widely used strategy for businesses. So, if you’re investing in an oil company, for example, they might choose to hedge against declines in the price of oil by using futures contracts. Understanding hedging would make it easier for you to make sense of the company’s financial undertakings.

Avoiding currency risk on foreign assets

Currency risk, or exchange rate risk, describes the potentially damaging impact that fluctuations in the value of a currency pair can have. There are a range of ways the term currency risk is applied but it is largely used to describe the negative effects of forex rates on the value of an asset that is being transferred across borders. The risk can apply to properties being sold overseas, overseas salaries and even currency conversion for holidays.

For example, if an individual was going on holiday to the US in six months’ time, they could opt to exchange their currency to dollars at the current rate or wait six months. While they might secure a better rate by waiting, they also might have to exchange at a worse rate – this is currency risk.

To combat currency risk, traders will hedge. Some of the most common ways to hedge currency risk include using options contracts, specialised exchange traded funds (ETFs) and leveraged products such as CFDs.

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Avoiding bitcoin risk

Cryptocurrencies – such as bitcoin – are infamously volatile, and due to their deregulated nature, offer very little in the way of protection for traders. Although this volatility can provide a range of trading opportunities, it can cause concern for more risk-averse traders. This is why some traders choose to hedge their bitcoin positions using strategies such as short selling, or hedging with derivatives and futures.

Best hedging strategies

There are several methods that can be used to hedge, but some can be extremely complicated. That’s why we’ve taken a look at some of the most widely used ways of hedging against risk – whether this is a specific strategy, a platform function, or an asset class that is considered a hedge. These strategies are:

Direct hedging

A direct hedge is the strategy of opening two directionally opposing positions on the same asset, at the same time. So, if you already have a long position, you would also take a short position on the same asset.

The advantage of using a direct hedge, rather than closing your position and re-entering at a better price, is that your trade remains on the market. Once the negative price movement is over, you can close your direct hedge.

Let’s say that you have a short position on the FTSE 100, but you believe that the index is going to see a short-term rise in price as a result of a number of constituents releasing positive earnings announcements. In such an instance, you might decide to open a buy position on the FTSE to minimise your losses.

Normally, these two positions would net off, meaning that the first would be closed, but some trading platforms have a function that enables traders to ‘direct hedge’.

Pairs trading

Pairs trading is a hedging strategy that involves taking two positions. One on an asset that is increasing in price and one on an asset that is decreasing in price. Pairs trading creates an immediate hedge because one trade automatically mitigates the risk of the other trade.

The method involves finding two opportunities that are almost identical but are currently trading at irregular prices – one is undervalued, while the other is overvalued – then taking advantage of the moves toward the assets’ fair values. This strategy is most commonly used for share trading, but it can also be used to trade indices, forex and commodities, as long as there is a correlation between the assets in question.

If you wanted to choose two stocks to pairs trade, you’d likely look for two companies that are within the same industry, have similar financials and historical trading ranges. This strategy is not necessarily dependent on the direction that either trade will move in, but on the relationship between the two assets. It is considered a ‘market-neutral’ strategy, as it takes both a long and short position.

Trading safe havens

Safe-haven assets are financial instruments that tend to retain their value, or even increase in price, during periods of economic downturn. There are a range of assets that fall into the categories of both safe havens and hedges, such as gold.

Gold is considered a safe haven, as it has historically been investors’ go-to asset during times of financial crisis, but it is also considered a hedge against a drop in the US dollar. As the currency falls, it causes the cost of goods imported from the US to increase in price – this often results in many traders and investors using the safe haven as a hedge against this inflation.

In fact, research by Baur and Lucey found that gold is considered the best hedge against a potential stock market crash – as 15 days following a crash, gold prices have tended to increase dramatically due to their safe-haven status. 1

Not all safe havens will be good assets for a hedging strategy, so it is important to do your research. But if you can use these well-known correlations to your advantage, they can be a good way to offset your risk.

How to hedge

As we have seen, hedging is achieved by strategically placing trades so that a gain or loss in one position is offset by changes to the value of the other. This can be achieved through a variety of strategies, such as opening a position that directly offsets your existing position or by choosing to trade assets that tend to move in a different direction to the other assets you are trading.

As there is a cost associated with opening a new position, you would likely only hedge when this is justified by the reduced risk. If the original position were to decline in value, then your hedge would recover some or all those losses. But if your original position remains profitable, you can cover the cost of the hedge and still have a profit to show for your efforts.

An important consideration is how much capital you have available to hedge, as placing additional trades requires additional capital. Creating a budget is vital to ensuring that you do not run out of funds. A common question is ‘how much should I hedge?’, but the answer will vary from trader to trader, depending on their available capital and attitude to risk.

The amount you should hedge depends on whether you want to completely remove your exposure, or only partially hedge a position. Hedging should always be tailored to the individual, their trading objectives and desired level of risk.

Calculating neutral exposure

Neutral exposure is the concept that a trader can completely offset risk by simultaneously being long and short in one or more markets. This is so an increase in one position offsets a decline in another. Essentially, traders can neutralise their risk by calculating their total exposure, and then hedging with a strategy that creates the same exposure in the opposite direction

Ways to hedge

Hedging can be carried out using a variety of financial instruments, but derivative products that take their value from an underlying market – such as CFDs – are popular among traders and investors alike.

Hedging CFDs

There are a range of benefits of CFDs which make them suitable for hedging. Perhaps the largest advantage is that they do not require a trader to own the underlying asset to open a position, which means that traders can speculate on markets that are falling as well as rising. This is extremely useful when hedging, because to neutralise market exposure, traders need to be able to take positions in both directions.

Discover whether you should hedge with CFDs

There are two ways to start hedging, depending on your level of confidence and expertise. Your options are:

  • Open an account. You can open an account with IG quickly and easily
  • Practise trading on a demo account. Test your hedging strategies in a risk-free environment with an IG demo account

Alternatively, you can join IG Academy to learn more about financial markets.

Alternatives to hedging

Although hedging strategies can be useful if you have a long-term belief that the market will rise or fall as you expect, they are not always beneficial. If you are unsure about a market’s future or can’t make a decision about how to hedge, then you might want to prepare for market risk by simply reducing the size of your position, or by not opening a position at all.

Alternatively, you could look to diversify your portfolio – opening positions across a variety of different asset classes. This way, you’ll be able to mitigate the risk that a decline in one position will wipe out the majority of your capital. By preparing your trading portfolio for the worst-case scenario, you’ll be able to reduce your need to hedge altogether.

Footnotes:
1 Baur and Lucey, 2007

How companies are using derivatives to hedge

Hedging, in terms of corporate finance, means to offset risk – often risks that cannot be insured against or budgeted for.

The most common risks where hedging can be an effective tool are:

  • Interest rates moving – It costs more to borrow, or savings bring in a lower rate of return
  • Adverse currency movements – exports are worth less or imports cost more
  • Rising raw materials costs – a poor crop or a natural/man-made disaster reduces the quantity on the market, or rising demand from other users pushes up the price

How does hedging work?

In financial markets, much hedging is done using derivatives. Be aware that hedging has its critics – particularly the use of financial derivatives as a hedging tool. Some see derivative products as a threat to market stability.

Much of this mistrust stems from the financial crisis of 2008, when a sharp downturn in the US housing market led to a collapse in derivative products linked to US mortgages.

Here, we’ll ignore these criticisms and focus on the types of derivative used as tools to hedge against the three risks identified above.

Hedging against interest rate risk

To keep things simple, let’s imagine that a company called DeltaCorp must, in a year, repay a loan of £1m plus a fixed rate of interest of 1.7%.

Now let’s say Sigma Group has a similar sized loan and is paying a floating rate of interest, based on six-month LIBOR at 0.5% plus 1%.

Sigma believes that over the next year interest rates will rise, and would like to limit its exposure to this risk.

Delta believes the interest rate environment is benign and it is willing to take a risk that by entering into an interest rate swap with Sigma, the overall annual rate it pays will be lower than the 1.7% it is already liable for.

Swap terms

Delta must still pay its initial lender the 1.7% fixed rate interest on its loan (£17,000), and Sigma must still pay the current floating rate of 0.5% + 1% (£15,000) to its original lender.

But, under the terms of the swap, Delta effectively owes Sigma £15,000, while Sigma owes Delta £17,000. This is partially offset, and so Sigma pays Delta the difference of £2,000.

Now let’s say Sigma’s prediction was right and rates did go up over the year, and the floating rate averaged 0.9% + 1%.

Both parties paid their interest obligations to their initial lenders, but under the terms of the swap agreement, Delta now owes Sigma the new floating rate amount of £19,000, while Sigma still owes Delta £17,000 – a net £2,000 to Sigma.

Sigma successfully hedged its exposure to the rising rate. It still had to pay that higher rate of 0.9% + 1% = £19,000, but received £2,000 under the terms of the swap from Delta. A total interest payment of £17,000 – the same as the 1.7% fixed rate.

Interest rate swaps are customised contracts – the specifications agreed between the two counterparties – but can be an effective way of cutting out the risk of falling interest rates.

The danger is that if the floating rate you pay to your counterparty rises significantly above the flat rate being paid to you, you’re on the wrong end of the deal and lose out.

Hedging against currency risk

When companies operate abroad and then repatriate foreign earnings back into their domestic currency, they do so at the risk of currency movements that could adversely affect their profits.

Here, the corporation can choose between two similar products: futures, which are among the most common derivatives, or forwards, which, like interest rate swaps, are bespoke agreements.

For this exercise, we’ll focus on the more common futures market. It is more transparent and accessed on several international exchanges, including Chicago Mercantile Exchange (CME) and Euronext.Liffe.

Exchange rate volatility

Let’s say that DeltaCorp, which sells cast aluminium products to a customer in France, is concerned over the volatility of the sterling/euro (£/€) exchange rate.

It expects payment from its fourth-quarter deliveries on 31 December, but is worried the pound will appreciate substantially between agreeing the sale price in September and payment in December.

DeltaCorp sold £100,000 worth of products in September, when £1 bought €1.15, which priced the sale at €115,000. If the pound appreciates to €1.25 by December, the French customer still pays the €115,000 agreed price but DeltaCorp only gets £92,000 for its goods, not the £100,000 it needed.

DeltaCorp can’t afford to lose £8,000 because of currency changes. So it seeks to ensure it doesn’t lose out on any potential currency moves by buying £100,000 of euro futures at a strike price of €1.15.

This means that whatever the exchange rate at the time the invoice is settled, DeltaCorp will get the money it expected when it made the sale.

Hedging against rising materials costs

This is similar in principle to currency hedging, in that corporations are looking to lock in materials purchasing at a particular price, rather than run the gauntlet of buying at spot prices during a period of rising prices.

So, for example, to continue making a profit on its manufacturing, DeltaCorp must buy its aluminium at no higher than £1,500 a tonne.

The futures market indicates it could buy at £1,450 a tonne five months from now, so DeltaCorp enters a futures contract to pay £1,450 for five tonnes in five months.

A fire in a supply factory causes a shortage of aluminium and the price rises to £1,600 per tonne. But DeltaCorp has a contract confirming it only has to pay £1,450, so its product pricing is not at risk.

Hedging can be a useful strategy in protecting revenue streams, and derivatives can be the ideal tool for this strategy.

But any hedger, speculator or investor who seeks to use the derivatives markets should also be aware that there are other costs involved, including commission, transaction charges and contract termination fees.

Remember also that when a risky trade goes wrong it can go spectacularly wrong. JP Morgan, trying to protect its European debt investments, went wrong to the tune of $2bn in the credit default swaps market in 2020.

But with skilful risk management, companies can take advantage of the tools available to hedge currency, interest rate and commodity risk. It can make them leaner, more agile and quicker to react to competition – the airline industry has hedged fuel prices for years.

Is Lead Still Worth Investing In? Here’s What You Need To Know In 2020

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Last Updated on August 16, 2020

Why is Lead Valuable?

Lead is a soft, dense metal with a low melting point. It is an important component in battery production. In addition, its high density and resistance to corrosion make it useful in industries ranging from piping to X-rays.

The history of lead as a component in producing goods traces back to the ancient Egyptians. The early civilization used the metal in pottery glazes, soldering components, paints and piping. They even cast ornamental objects out of lead. By the 15th century, lead was used as a roofing material for cathedrals and in stained-glass windows.

By the late 1800s, lead-acid storage battery production began.
Today lead production is a huge global business. Modern mines produce more than 4.7 million metric tons of the metal annually, while recyclers produce another roughly 6 million metric tons.

How is Lead Produced?

There are two methods for producing lead: primary production (mining) and secondary production (recycling). Each method individually accounts for about half of total overall production.

Primary Production

Primary production of lead involves extracting the metal from ores found deep in underground mines. More than 60 minerals contain lead, but only three contain enough to be considered commercially viable:

1. Galena: This mineral is the most common one extracted for lead production. In its purest form, it contains only lead and sulfur.

However, most galena contains other trace metals including:

2. Cerussite: a mineral known as white lead

3. Anglesite: a crystalline mineral that occurs when galena oxidizes

More than 95% of lead is extracted from one of these three minerals. However, ores containing these minerals usually contain significant deposits of other valuable metals such as silver and zinc. As a result, lead production usually occurs as a byproduct of silver or zinc mining.

The process of primary production involves three steps:

Ore concentration

Lead and zinc ores usually occur together, and they often contain other valuable metals such as gold, silver and copper. The first step, then, is to isolate the lead in the ores.

A series of stages called froth flotation breaks down the ores into particles with greater concentrations of lead ore. First, the ore is ground with water into fine sand particles.

The resulting particles are then further diluted with water and chemical detergents and mixed in a series of tanks. The tanks agitate the mixture, and the lead and zinc particles float to the top, while clay and other silicates sink to the bottom.

These particles get skimmed off the top, where they are further concentrated. A chemical agent called a depressant is added to a tank with the lead and zinc particles. This causes most of the zinc ore to sink to the bottom and the lead ore to float to the top.

The lead ore then gets skimmed off. (Additional chemicals, such as copper sulfate, allow the zinc ores to be skimmed off later in the process.)
At this stage, the lead particles skimmed contain between 40 to 80% lead. The remaining concentration contains other particles such as silver, sulfur or zinc. The particles are now ready to be heated in smelters.

Lead Blast Furnace via T.A Rickard on Wikimedia

Smelting

To remove the sulfur and other impurities, the lead particles are mixed with other materials including lime and sandstone. The resulting mixture is spread on a moving grate and heated by air that reaches temperatures of 2,550 degrees Fahrenheit.

This roasting process produces a brittle material called sinter, which is mostly lead oxide, but also contains zinc, iron and silicon oxides. The sulfur in the concentrate burns away in the form of sulfur dioxide gas.

The sinter is then broken into lumps and loaded into a blast furnace with coke fuel. The coke burns at temperatures of 2,200 degrees Fahrenheit and produces molten lead.

Refining

The molten lead produces base lead bullion that is 95 – 99% pure. Further refining in drossing kettles removes additional impurities. In order to be commercially viable, lead must be 99 – 99.999% pure.

After the impurities have been removed and the lead has been cooled, it is cast into blocks that may weigh as much as a ton.

Some refining plants produce lead alloys for specific industrial purposes. For example, adding antimony produces an alloy that is stronger than pure lead. This makes the product suitable for pipes, sheet, cable sheathing and ammunition.

Secondary Production

Secondary production of lead involves recycling items such as batteries. Cable coverings, pipes, sheets and other metals can also be recycled for lead. Recycling lead is simple and accounts for half of all lead production. In Europe and the United States, the recycling rate of lead from batteries is 99%.

Recycling Lead in a Lead Acid Battery Recovery Facility via NIOSH on Wikimedia

Smelters separate the components of batteries such as the lead, paste, plastics and electrolytes (acid). The lead particles are processed in blast furnaces where they are refined for use in new batteries. Lead obtained from recycling is equal in quality and purity to lead obtained from mining.

China is by far the leading country for lead mine production. It accounts for about half of all output, which is more than five times the next largest producer, Australia.

Hedging

Introduction

A feature of academic writing is the need to be cautious in one’s statements in order to distinguish between facts and claims. This feature is termed ‘hedging’. Hedging can be defined as the use of linguistic devices to show hesitation or uncertainty and to display politeness and indirectness. Hedging is absolutely crucial in good academic writing and hedged words are said to account for 1 in every 100 words.

When writing for academic disciplines it is necessary not only to show that you are able to write in a formal, abstract fashion, but also that you are able to show the extent to which you believe in, or are prepared to stand up for, what you are reporting/claiming.

People use hedged language for several different purposes but perhaps the most fundamental are the following:
• to minimise the possibility of another academic/teacher/lecturer/colleague/student opposing the claims you are making
• to enable you as a writer to be more precise when reporting results, e.g. you can show that something is not 100% proven, but rather that it is indicated and subsequently assumed.
• to enable you to execute a politeness strategy in which you are able to acknowledge that perhaps there may be flaws in your claims
• to conform to a now accepted practice writing style

Objectives

To raise your awareness of the value of hedging language in academic writing
To guide you through a series of activities designed to help you build a vocabulary of hedging expressions
To provide you with a supported framework in which you can practice using hedging expressions.

Activity 1: Identifying a ‘hedged’ expression

There are many different ways in which language can be ‘hedged’. These include using modal verbs such as ‘may’ and ‘might’, using modal nouns such as ‘probability’ and ‘assumption’, using lexical verbs which denote a sense of caution i.e. ‘assume’ and ‘indicate’ and by using expressions which show a sense of caution or vagueness, i.e. ‘it can be argued that’ or ‘it is likely to be the case that’.

Instruction

Decide which of the sentences below are considered to be academically competent. That is, the ones which use a hedged expression to make a claim. Tick yes, if you think the sentence could be effective in helping you to support your claims in an academic essay and no if you think it would not be effective in helping you to support your claims in an academic essay. You will find an example below to help you make your first decision.

The ‘management’ of danger is also not the sort of language to appear within policy documents that refer to GRT children, where it might be construed to reflect systematic failures in schools. The hedge is in the words ‘it might be construed to reflect’.

The ‘management’ of danger is also not the sort of language to appear within policy documents that refer to GRT children, which reflects systematic failures in schools. This sentence does not use hedging language. It makes a strong claim and makes no attempt to use cautious language. It is a very direct and very certain claim. This could be seen as impolite and also academically naive.

Q1. Viewing a movie in which alcohol is portrayed appears to lead to higher total alcohol consumption of young people while watching the movie.

Show feedback Hide feedback

Yes – ‘appears’ is a verb used to express caution and is therefore a hedging word.

Q2. Furthermore, this proves that humans are wired to imitate.

Show feedback Hide feedback

No. This sentence does not use a hedging expression.

Q3. It is unquestionable that our survey proved that the portrayal of alcohol and drinking characters in movies directly leads to more alcohol consumption in young adult male viewers when alcohol is available within the situation.

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No. This sentence does not use a hedging expression.

Q4. Implications of these findings may be that, if moderation of alcohol consumption in certain groups is strived for, it may be sensible to cut down on the portrayal of alcohol in programmes aimed at these groups and the commercials shown in between.

Show feedback Hide feedback

Yes. This sentence uses hedging words.

Implications
may be

Q5. This effect might occur regardless of whether it concerns a real-life interaction (Quigley & Collins, 1999).

Show feedback Hide feedback

Yes. This sentence uses a hedging word.

Q6. It definitely proves that a movie in which a lot of partying is involved triggers a social process between two participants that affects total drinking amounts.

Show feedback Hide feedback

No. This sentence does not use hedged language.

Activity 2: Familiarising yourself with hedged expressions

Being able to identify which sentences are using hedged expressions is the first step in learning how to use hedged expressions yourself. Being able to identify the actual words which infer caution is the next step. In the following exercise we will concentrate on identifying the actual words which suggest you are being cautious in your claims.

Instruction

Decide which of the words and phrases in the sentences below express signs of caution, vagueness or playing down of claims. Check the box next to the word which shows caution and then check your answers with the feedback. There may be more than one correct answer.

1. It is believed that alcohol related health problems are on the rise.

believed
related
rise

Show feedback Hide feedback

2. Drinking to excess, or ‘binge drinking’ is often the cause of inappropriate behaviour amongst teenagers.

Drinking
excess
often
inappropriate
amongst

Show feedback Hide feedback

3. It seems as though the experiment conducted simply confirms suspicions held by the academic and medical professions.

seems
conducted
confirms
suspicion
held

Show feedback Hide feedback

4. However, attrition was greatest among the heaviest drinking segment of the sample, suggesting under-estimation in the findings, and although the study provided associational, prospective evidence on alcohol advertising effects on youth drinking, it addressed limitations of other research, particularly the unreliability of exposure measures based on self-reporting (Synder and Slater, 2006).

However
suggesting
although
limitations
particularly

Show feedback Hide feedback

5. These differences may be due to the fact participants reporting higher consumption levels were primed to overrate their weekly drinking by the condition they were in.

may
reporting
overrate

Show feedback Hide feedback

6. The crack tends to grow into the more brittle material and then stay in there, whether the initial crack tip lies in the graded material or in the more ductile material (and thereafter advances across the graded layer.

tends
whether
thereafter

Show feedback Hide feedback

7. It seems likely that the details of the predictions depend on the assumed variations of the toughness parameter and the yield stress.

It seems likely that
the details of the predictions
depend on the assumed variations
of the toughest parameter and the yield stress

Show feedback Hide feedback

‘It seems likely that’

8. If a real physical system shows a variation of both material properties across the graded layer, the assumed linear variation may not give the best approximation.

If
shows
variation
properties
assumed
linear
may
the
best
approximation

Show feedback Hide feedback

9. The idea of ‘community’ in terms of GRT lives is very strong and could be seen to correspond to some of the nostalgic constructs that non-GRT groups place on ‘community’.

The idea of ‘community’ in terms of GRT lives
is very strong and
could be seen
to correspond to some of the nostalgic constructs
that non-GRT groups place on ‘community’

Show feedback Hide feedback

10. This scatter can be attributed to the difficulties in measuring the dent depth due to specimen processing.

This scatter
can be attributed
to the difficulties in measuring the dent depth
due to specimen processing

Show feedback Hide feedback

‘can be attributed’

Activity 3: Identifying different ways in which hedging can be achieved

Sometimes, a hedge is expressed through a modal verb, but at other times, it is achieved through using a noun. In the following exercise you can see the different ways in which hedging can be achieved.

Instruction

Look at the list of words above the check boxes. Decide which type of word or phrase this is. Check the most appropriate check box before checking your answer with the feedback button.

If you need help with this activity, try using the following website uefap

1.
possible
probable
definite

modal verbs
lexical verbs
modal adjectives
adverbs
introductory phrase
nouns

Show feedback Hide feedback

2.
may
might
can
could
should

modal verbs
lexical verbs
modal adjectives
adverbs
introductory phrase
nouns

Show feedback Hide feedback

3.
It can be argued that.
It can thus be concluded that.
One can assume that.

modal verbs
lexical verbs
modal adjectives
adverbs
introductory phrase
nouns

Show feedback Hide feedback

4.
assume
indicate
believe
interpret

modal verbs
lexical verbs
modal adjectives
adverbs
introductory phrase
nouns

Show feedback Hide feedback

5.
probably
usually
possibly

modal verbs
lexical verbs
modal adjectives
adverbs
introductory phrase
nouns

Show feedback Hide feedback

6.
assumption
possibility
indication

modal verbs
lexical verbs
modal adjectives
adverbs
introductory phrase
nouns

Show feedback Hide feedback

Activity 4: Completing hedged expressions

In the following activity you will begin to construct hedged sentences.

Instruction

Complete the sentence by choosing the appropriate word from the list.

concluded / suggested / proven / estimated

1. It can be that, for young adult males, the portrayal of alcohol on a television screen might lead to increased alcohol consumption.

Show feedback Hide feedback

The answer is: concluded.

The clue is in the clause ‘the portrayal of alcohol on a television screen might lead to increased alcohol consumption’. In this clause the writer is drawing a logical conclusion and therefore hte word ‘concluded’ is the best fit.

The word ‘suggested’ would not work because the clause, ‘the protrayal of alcohol on a television screen might lead to increased alcohol consumption’ is not a suggestion.

The word ‘estimate is also unsuitablt because the clause ‘the protrayal of alcohol on a television screen might lead to increased alcohol consumption’ is not a guess – guesses suggest that there is no evidence.

The word proven is also unsuitable as this conclusion has not been scientifically proven. The word ‘might’ demonstrates this.

will / may / must

2. . which have been the case when they entered our laboratory setting alone.

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The answer is: may.

‘Must’ is unsuitable because an element of doubt needs to be expressed. ‘Must’ does not demonstrate doubt.

‘Will’ is unsuitable because this is not set in the future.

definite / unlikely / normal

3. It is not that the characters in the movies are generally regarded as positive (McIntosh et al., 1999), which should add to the low level priming effect of observing drinking behaviour.

Show feedback Hide feedback

The answer is: unlikely.

‘Definite’ is unsuitable because the word ‘generally’ shows that this isn’t always 100% true.

‘Normal’ is unsuitable because it does not make lexical sense.

should / could / may

4. When in real life, anticipation of others’ reactions be among the causes of imitation.

Show feedback Hide feedback

The answer is: may.

‘Should’ is unsuitable because it suggests strong advice. The example sentence is not giving advice.

‘Could’ is a possibility, however, it does not highlight the concept of possibility as well as the word ‘may’.

will / would / must

5. Nevertheless, from an experimental perspective, it be better to a) compare a movie without any alcohol portrayals versus a movie with many alcohol portrayals or b) to use one movie but to do careful editing to leave out all alcohol scenes in one version.

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The answer is: would.

‘Would’ expresses the idea of an imaginary situation and/or possibility.

‘Will’ is inappropriate because it suggests that we are talking about the future, which it not true.

‘Must’ is unsuitable because is does not communicate the notion of possibility.

probable / possible / definite

should / will / might

6. Furthermore, it is also that besides imitation, the activation of alcohol norms appeals to pre-existing norms and expectancies of people, which lead to alcohol intake, or that alcohol portrayals on films and in commercials function as a cue that affects craving in drinkers (Larsen et al,. 2009)

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There answers are: ‘possible’ and ‘might’

‘Probable’ is not suitable because it suggests that this basically correct. Whereas possible still maintains the notion of possibility.

‘Definite’ is inappropriate because it removes the notion of possibility.

‘Should’ is not possible because it is strong advice removes the notion of indefiniteness.

‘Will’ is not suitable because we are not discussing something definite in the future.

if / whether / that

7. However, it is unknown the underlying mechanisms differ for food or drink portrayals in the media

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The answer is: whether.

‘If’ could also be used although it is less favourable than ‘whether’ because it sounds less formal.

‘That’ is inappropriate because it does not express the concept of unknown outcomes in the future.

cause / case / reason

could / appears / may

8. If this is the , the actual effect of the portrayal of alcohol be even stronger.

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The first answer is: case. ‘Reason’ and ’cause’ do not make lexical sense and therefore cannot be used.

The second answer is: may. ‘Could’ could also be used, although a less preferable one to ‘may’ because of the level of possibility it denotes. ‘Appears’ is not suitable because grammatically speaking, it does not fit. It would need to be followed by the word ‘to’.

Indications / Implications / Deductions

Might / May / Must

Appear / May / Would

9. of these findings be that, if moderation of alcohol consumption in certain groups is strived for, it be sensible to cut down on the portrayal of alcohol in programmes aimed at these groups and the commercials shown in between.

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The first answer is: Implications, because this suggests that there are outcomes which result from this.

‘Indications’ is not suitable because nothing is being highlighted.

‘Deductions’ is inappropriate because there are no conclusions being drawn.

The second answer could be either: ‘may’ or ‘might’. ‘Must’ could not be used because it gives no idea of possibility.

The third answer is: ‘may’. ‘Appear’ is incorrect because of the grammar (see no.8) and ‘would’ is inappropriate because it sounds like we are giving strong advice rather showing possibility.

could / should / would

10. It be interesting to test whether the effects of alcohol commercials are beverage specific

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The answer is: would, because it communicates the idea of an imaginary, yet possible situation in the future.

‘Could’ is unsuitable as it suggests possibility.

‘Should’ is inappropriate because it gives strong advice.

Activity 5: Completing hedged expressions #2

In this activity you will coplete hedged expressions using vocabulary you have looked at in previous acativities. You will not be given a choice of words.

Instruction

Complete the expressions using a word of your own choice. Remember to use ‘cautious’ language and to ‘hedge’.

The present results further that the estimated effect of body fatness on LVM depends largely on the particular combination of body-size and body-fatness predictors chosen for the LVM models.

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Other possibilities: implied

Although adults with higher BMI values to be more obese, BMI per se does not provide information on relative amounts of FFM and fat mass, nor does it estimate the absolute value of body fat.

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Other possibilities: Although adults with higher BMI values have a tendency .

It is that after the placebo preload, participants became more wary of the task, perhaps owing to the previous experience of having to inhibit responses suddenly after the habit-forming in blocks 2 and 4.

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Other possibilities: plausible, probable

Thus, it be that in accordance with Marinkovic et al.’s (2000) data, a moderate dose of alcohol has basic motor disinhibiting effects.

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Other possibilities: may, could, might

Answer 2: suggested

Other possibilities: assumed, propounded, proposed

However, as the effects were seen on latencies not on error commission during the no-go condition, it be that a priming dose of alcohol may have a greater effect on active approach systems like BAS.

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Other possibilities: may, might

Answer 2: suggested

Other possibilities: propsoed, inferred

Activity 6: Hedging quiz

In this last interactive activity you will answer questions related to hedging. If you have spent time working your way through the previous activities you should find the quiz poses no obstacles for you.

Instruction

Click on the link, open the quiz and answer the questions. You will be prompted to try again if you do not guess the answer correctly. You can try as many times as you like to answer the questions.

References:

Anderson, P, de Bruijn, A, Angus, K, Gordon, R & Hastings, G. 2009. The impact of alcohol advertising and media exposure on adolescent alcohol use: a systematic review of longitudinal studies. Alcohol & Alcoholism. 44/3. 229-243.

Engels, R.C.M.E., Hermans, R, van Baaren, R.B., Hollenstein, T & Bot, S.M. 2009. Alcohol portrayal on television affects actual drinking behaviour. Alcohol & Alcoholism. 44/3. 244-249

Larsen H, Engels RCME, Granic I et al. (2009) An experimental study on imitation of alcohol consumption in same-sex dyads. Alcohol (resubmission).

Marinkovic, K., Halgren, E., Klopp, J. et al. (2000). Alcohol effects on movement-related potentials: a measure of impulsivity? Journal of Studies on Alcohol 61. 24 – 31

McIntosh WD, Smith SM, Bazzini DG et al. (1999) Alcohol in the movies: characteristics of drinkers and non-drinkers in films from 1940 to 1989. Journal of Applied Social Psychology 29. 1191–9.

Myers, M & Bhopal, K. 2009 Gypsy, Roma and Traveller Children in Schools: Understandings of Community and Safety. British Journal of Educational Studies 57/4. pp 417 – 434

Rose, A.K. & Duka, T. 2007. The influence of alcohol on basic motoric and cognitive disinhibition. Alcohol & Alcoholism. 42/6. 544-551

Shah, Q. 2009. Impact resistance of a rectangular polycarbonate armour plate subjected to. International Journal of Impact Engineering. 36. 1128 – 1235

Shifan, D., Harrist, R.B., Rosenthal, G.L.& Labarthe, D.R. 2009. Effects of body size and body fatness on left ventricular mass in children and adolescents project heartbeat!. American Journal of Preventative Medicine. 37/1. 97 – 101

Snyder, L., Flemming Milici , F., Slater,M., Sun, H. & Strihakova, Y. (2006) Effects of Alcohol Advertising Exposure on Drinking Among Youth. Archives of Paediatrics & Adolescent Medicine 60. 18 – 24

© Jessica Cooper/ 2020/ Queen Mary University of London / Photograph used under a creative commons attributions license courtesy of Caitlinator

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