 |
Definition of 'Short Hedge'
An investment strategy that is focused on mitigating a risk that has already been taken. The "short" portion of the term refers to the act of shorting a security, usually a derivatives contract, that hedges against potential losses in an investment that is held long.
If a short hedge is executed well, gains from the long position will be offset by losses in the derivatives position, and vice versa.
|
 |
Investopedia explains 'Short Hedge'
A common risk in short hedging is basis risk, or the risk that price levels will not change much over the period the hedge is in place; in this scenario, the asset held in the long position would not gain any value, and the short hedge would lose value.
Short hedging is often seen in the agriculture business, as producers are often willing to pay a small premium to lock in a preferred rate of sale in the future. Also, short hedges involving interest rates are common among institutional money managers that hold large amounts of fixed income securities and are concerned about reinvestment risk in the future.
|
Search results for 'Short Hedge'
-
http://stocks.investopedia.com/stock-analysis/2012/3-Retailers-Favored-By-Hedge-Funds-And-Short-Sellers-JCP-LIZ-OXM0221.aspx
With consumer confidence at a one-year high, keep your eye out on these three retailers
favored by hedge funds and short sellers. ... Hedge Funds,Short Selling. ...
-
http://www.investopedia.com/articles/03/112603.asp
... For example, a long/short manager might purchase a portfolio of core stocks that
occupy the S&P 500 and hedge by selling (shorting) S&P 500 Index futures. ...
-
http://www.investopedia.com/articles/optioninvestor/09/zero-premium-hedge.asp
... 06 2009 | Filed Under » ETFs, Futures, Hedge Funds, Options, Stocks. One of the
more popular ways that hedge funds make money is to be long and short on any ...
-
http://www.investopedia.com/articles/forex/09/exchange-rate-risk-currency-etf.asp
... Therefore, to hedge the $10,000 position in the EWC units, the investor would short
sell 100 FXC shares, with a view to buying them back at a cheaper price ...
-
http://www.investopedia.com/articles/mutualfund/05/HedgeFundHist.asp
A Brief History Of The Hedge Fund. November 15 2009 | Filed Under » Futures,
Hedge Funds, Mutual Funds, Options, Short Selling. Famed ...
-
http://www.investopedia.com/articles/mutualfund/07/mutual_fund_retail.asp
... kind of money or don't meet the net worth guidelines, there are some exchange-traded
funds (ETFs) that use hedge fund strategies (like short selling), such as ...
-
http://www.investopedia.com/articles/professionaleducation/07/Series7OptionswStocks.asp
... The basic definition of a short hedge is short stock plus a long call. The investor
must buy the insurance to protect the stock position. ...
-
http://financialedge.investopedia.com/financial-edge/0811/Europe-Bans-Short-Selling.aspx
... Europe Bans Short Selling. Posted: August 12, 2011 2:28PM by ... Filed Under:
Short Selling. In its simplest form, short selling involves ...
-
http://financialedge.investopedia.com/financial-edge/0911/How-Much-Disaster-Can-Gold-Hedge.aspx
... Is Good For Just because gold is not a perfect inflation hedge, nor an ... While gold's
movements are very unpredictable over short periods of time, outperformance ...
-
http://www.investopedia.com/articles/03/121003.asp
... Hedge funds - because they employ derivatives, short sales or non-equity investments -
tend to be uncorrelated with broad stock market indexes. ...
|
|
