By | March 4, 2021

It is an investment position intended to offset potential losses or gains.

Hedge, can be constructed from various kinds of financial instruments, including stocks etc.

Hedging is a practice of taking a position in one-market to offset and balance against the risk adopted by assuming position in contrary or opposing market.

Hedge -> reduction of risk by exploring correlation between various risky investments.

eg : delta, gamma and vega hedging.

Under and Over hedging.

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