Related Words

Additional Hedge: A protection against borrower fallout risk in the mortgage pipeline.

Hedger: Hedgers in the futures market try to offset potential price changes in the spot market by buying or selling a futures contract. In general, they are either producers or users of the commodit . . . View Full Definition

Inflation Hedge: Accounting practices allowing for the effects of inflation.

Hedged Tender: A portfolio consisting of a long position in the stock and a long position in the put option on the stock, so as to be riskless and produce a return that equals the risk-free interest rate.

Hedged Portfolio: An options strategy in which an investor with a long position in an underlying stock buys an out-of-the-money put and sells an out-of-the-money call. The hedge wrapper defines a range where . . . View Full Definition

Hedge Wrapper: For options, ratio between the change in an option's theoretical value and the change in price of the underlying stock at a given point in time. For convertibles, percentage of a convertible . . . View Full Definition

Long Hedge: The purchase of a futures contract in anticipation of actual purchases in the cash market. Used by processors or exporters as protection against an advance in the cash price. Related: hedge, . . . View Full Definition

Money Market Hedge: The use of borrowing and lending transactions in foreign currencies to lock in the home currency value of a foreign currency transaction.

Short Hedge: Used for listed equity securities. A special trading situation where a short sale is allowed on a minustick. The owners of a convertible trading at parity can sell the equivalent amount of c . . . View Full Definition

Sell Hedge: Related: short hedge.