In this paper, we test the hypothesis that CEO narcissism influences firms’ hedging behaviour. Our empirical evidence, based on hand‐collected data on derivative positions in the U.S. oil and gas industry, suggests that firms with a narcissistic CEO hedge more selectively. Furthermore, we find that these firms reduce selective hedging comparatively more following a sharp price collapse that sent the industry into a state of distress. This result is in line with the ‘narcissistic paradox’: While scoring high on self‐esteem and grandiosity in the normal case, such individuals are also inherently fragile and liable to crumble when faced with adversity.