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Portfolio Insurance

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Description of Portfolio Insurance. Explanation.



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Definition Portfolio Insurance. Description.

 

Portfolio Insurance is an investment strategy which uses selling short stock index futures or buying stock index put options to protect stock portfolios against market declines. It is a method of hedging a portfolio of stocks against the market risk.

 

Institutional investors frequently use this hedging technique to protect their portfolio against volatility due to uncertain or volatile market behavior.


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Compare with: Strategic Risk Management  |  Hedge  |  Hedging  |  Non-Systemic Risk  |  Systemic Risk

 

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End of description Portfolio Insurance. An explanation.

 

 

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