Hedge

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Description of Hedge. Explanation.

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Definition Hedge. Description.


A Hedge is the purchase or sale of a Call Option, Put Option or Futures Contract as a temporary substitute for a transaction to be made at a later date. The purpose of a hedge is to avoid or minimize exposure to an unwanted business risk, by purchasing on both sides of a risk, so that any loss in one security is countered by gains in the other securities. A hedge can be seen as some kind of Portfolio Insurance.


Usually it involves the initiation of a position in a futures or options market that is intended as a temporary substitute for the sale or purchase of the actual commodity.


Typical Risks that are hedged are: Interest Risk, Equity Risk, Credit Risk and Forex Risk.


Hedge Forum
  Hedging and Transfer Pricing
What is the relationship between hedging and trans...
     
 

Hedge Special Interest Group


Special Interest Group

 

Best Practices - Hedge Premium

Expert Tips - Hedge Premium


Resources - Hedge Premium

Overview of Hedge Fund Investment Strategies

Presentation about Hedging, introducing many terms...
Usage (application): Hedge Funds, Hedging, Investment Strategies
 

Financial Derivatives: an Overview

This presentation provides an overview of differen...
Usage (application): Hedge Funds, Financial Derivatives, Investment Strategy
 

Introduction and Summary of Interest Rate Swap

Explanation of Base Rate Swaps.
A swap is an ...
Usage (application): Initial Understanding of Interest Rate Swap
 

Introduction and Summary of Hedging

Explaination of hedging using futures contracts wi...
Usage (application): Initial Understanding of Hedging, Trainings, Workshops
 

Introduction and Summary of Futures and Stop Loss Contracts

A derivative is a financial contract which derives...
Usage (application): Initial understanding of Futures and Stop Loss Contracts
 
 

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Compare with: American-Style Option  |  European-Style Option  |  Call Option  |  Put Option  |  Asian Option  |  Futures Contract  |  Hedging  |  Non-Systemic Risk  |  Systemic Risk  |  Portfolio Insurance  |  Short Selling

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