7 Derivative Strategies to Hedge Against Hyperinflation
Institutional investors are increasingly turning to derivatives to protect portfolios from inflationary shocks. Unlike traditional assets, derivatives offer precise exposure to inflation expectations and volatility dynamics—critical tools in an era of monetary instability.
Zero-Coupon Inflation Swaps (ZCIS) dominate as the institutional standard for direct CPI risk transfer. These contracts allow parties to exchange fixed payments for inflation-linked returns, effectively hedging against purchasing power erosion. Meanwhile, TIPS futures and options provide Leveraged access to real interest rates, appealing to managers seeking amplified exposure.
Precious metals futures—particularly Gold and silver—remain a cornerstone of inflation hedging. Their historical inverse correlation with fiat currency weakness makes them a tactical complement to more complex derivative instruments.
