In efficient financial markets, all hedging devices should be perfect substitutes!

In general, alternative hedging devices are reasonably good substitutes for one another. However this statement is not quite true for at least three reasons:

(1) Not all hedging instruments convey the same rights and obligations. For example, a forward contract commits the parties to go through with the transaction while an option gives the choice of whether to proceed to the option holder.

(2) Not all hedging devices are taxed the same way.

(3) Money market hedges appear on the balance sheet as assets and offsetting liabilities while derivative securities do not.