Hedged Tender

AAA

DEFINITION of 'Hedged Tender'

A strategy in a tender offer where an investor short sells a portion of the shares he or she owns. This strategy is used to protect against the risk of loss in the event that the tender offer does not go through.

INVESTOPEDIA EXPLAINS 'Hedged Tender'

For example, imagine a stock was trading at $30, and there was a tender offer for $40 per share. A hedged tender would attempt to lock in the $40 per share even if the offer does not go through.

RELATED TERMS
  1. Howard-D'Antonio Strategy

    An algorithm designed to maximize the expected return of a portfolio. ...
  2. Short Tender

    An investing practice that involves using borrowed stock to respond ...
  3. Hedge

    Making an investment to reduce the risk of adverse price movements ...
  4. Short Sale

    A market transaction in which an investor sells borrowed securities ...
  5. Tender

    To invite bids for a project, or to accept a formal offer such ...
  6. Tender Offer

    An offer to purchase some or all of shareholders' shares in a ...
RELATED FAQS
  1. Can delta be used to calculate price volatility of an option?

    The delta of an option is a component of the Black-Scholes option pricing formula, which provides the implied volatility ... Read Full Answer >>
  2. What are the most effective hedging strategies to reduce market risk?

    There are a number of effective hedging strategies to reduce market risk, depending on the asset or portfolio of assets being ... Read Full Answer >>
  3. How can I use equity options to protect my stock portfolio from downturns?

    Equity options, or stock options, could serve as protection and help to mitigate risk for a long stock portfolio. Stock options ... Read Full Answer >>
  4. What techniques can be used to hedge exposure to the chemicals sector?

    An investor can hedge exposure to the chemicals sector in two ways. Because the sector is cyclical, an investor can allocate ... Read Full Answer >>
  5. What are the primary sources of market risk?

    Market risk is the risk of loss due to the factors that affect an entire market or asset class. Market risk is also known ... Read Full Answer >>
  6. How do I learn technical skills for trading commodities?

    Many resources are available for those seeking to learn to trade commodities, also known as futures, directly from the major ... Read Full Answer >>
Related Articles
  1. Investing

    A Breakdown Of Stock Buybacks

    Find out what these company programs achieve and what it means for stockholders.
  2. Options & Futures

    A Beginner's Guide To Hedging

    Learn how investors use strategies to reduce the impact of negative events on investments.
  3. Investing

    The Strong Dollar’s (Real) Toll On Tech Stocks

    A large portion of U.S. technology companies’ sales occur overseas, given the strong international business and consumer demand from many U.S. tech firms.
  4. Mutual Funds & ETFs

    How To Start a Hedge Fund In the United States

    A general overview of how to start a hedge fund firm in the United States, including complying with state and federal regulations.
  5. Technical Indicators

    Strategies To Trade Volatility Effectively With VIX

    VIX offers a bird’s eye view of real-time greed and fear, while providing a snapshot of the market’s expectations for volatility in the next 30 days.
  6. Mutual Funds & ETFs

    Are These the Top Inverse ETFs of 2015?

    Short shy? Here's a list of top inverse ETFs to help you profit from a decline in the value of an index or group of stocks.
  7. Stock Analysis

    How Are Interest Rates Affecting Annaly Cap Mgmt?

    Annaly Capital Management reported a net loss of $658 million thanks to the mortgage REIT's strategy of hedging its exposure to higher interest rates.
  8. Investing

    The Best Way To Approach The Currency Hedge

    Currency is going to continue to be an important factor in investment choices, particularly as the dollar strengthens.
  9. Investing

    Hedged ETFs That Help You Cushion Currency Impact

    If you’re an investor holding non-U.S. assets, the returns on your investments will be affected when you translate your investment from its local currency
  10. Investing

    How To Take Advantage Of A Stronger U.S. Dollar?

    If you are invested in the market, you will feel the effects of a stronger dollar, especially if overseas interests are part of your diversified portfolio

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center