The relationship between a hedger's objectives, choice of hedging market, and optimal hedge ratio is assessed. Propositions tested show hedgers may act as though they are pursuing the traditional objective of risk minimization even though the objective of all hedgers is utility maximization; a firm's optimal strategy can involve futures, options, or cash markets at different times; and utility maximizing hedge ratios can be greater than one or less than zero. Also, an innovation in the presentation of standard mean-variance results helps explain why a firm's optimal hedge ratio is not constant over time.