Hedge

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.

Leave a Reply

Your email address will not be published. Required fields are marked *