Logo
Unionpedia
Communication
Get it on Google Play
New! Download Unionpedia on your Android™ device!
Free
Faster access than browser!
 

Hedge (finance)

Index Hedge (finance)

A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. [1]

93 relations: Airline, Arbitrage, Asset–liability mismatch, Bond (finance), Business, Call option, Capital control, Cash flow hedge, Clearing (finance), Coal, Commodity, Commodity market, Commodity risk, Competition, Contract, Covered interest arbitrage, Credit risk, Currency, Derivative (finance), Discounts and allowances, Diversification (finance), Electricity market, Employee stock option, Energy derivative, Equity risk, Exchange-traded fund, FASB 133, Financial instrument, Financial market, Financial risk, Fixed bill, Foreign exchange hedge, Foreign exchange market, Foreign exchange risk, Forward contract, Forward rate agreement, Fuel price risk management, Fungibility, Futures contract, Futures exchange, Hard currency, Hedge accounting, Hedge fund, Hurricane Katrina, IAS 39, Immunization (finance), Insurance, Insurance policy, Interest rate, Interest rate parity, ..., Interest rate risk, Interest rate swap, Iraq War, Jet fuel, Liquidity risk, List of commodity traders, Long (finance), Long/short equity, Market neutral, Maturity (finance), Moneyness, Non-deliverable forward, Option (finance), Outline of finance, Over-the-counter (finance), Pairs trade, Partial derivative, Petroleum, Portfolio (finance), Precious metal, Profit (economics), Protective put, Put option, Risk, Risk management, Risk reversal, Short (finance), Southwest Airlines, Spread trade, Stock, Stock market index future, Stock trader, Strike price, Superhedging price, Supply and demand, Swap (finance), Systematic risk, Underlying, Volatility risk, Volume risk, Wheat, Wholesaling, Widget (economics). Expand index (43 more) »

Airline

An airline is a company that provides air transport services for traveling passengers and freight.

New!!: Hedge (finance) and Airline · See more »

Arbitrage

In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices.

New!!: Hedge (finance) and Arbitrage · See more »

Asset–liability mismatch

In finance, an asset–liability mismatch occurs when the financial terms of an institution's assets and liabilities do not correspond.

New!!: Hedge (finance) and Asset–liability mismatch · See more »

Bond (finance)

In finance, a bond is an instrument of indebtedness of the bond issuer to the holders.

New!!: Hedge (finance) and Bond (finance) · See more »

Business

Business is the activity of making one's living or making money by producing or buying and selling products (goods and services).

New!!: Hedge (finance) and Business · See more »

Call option

A call option, often simply labeled a "call", is a financial contract between two parties, the buyer and the seller of this type of option.

New!!: Hedge (finance) and Call option · See more »

Capital control

Capital controls are residency-based measures such as transaction taxes, other limits, or outright prohibitions that a nation's government can use to regulate flows from capital markets into and out of the country's capital account.

New!!: Hedge (finance) and Capital control · See more »

Cash flow hedge

A cash flow hedge is a hedge of the exposure to the variability of cash flow that.

New!!: Hedge (finance) and Cash flow hedge · See more »

Clearing (finance)

In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled.

New!!: Hedge (finance) and Clearing (finance) · See more »

Coal

Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams.

New!!: Hedge (finance) and Coal · See more »

Commodity

In economics, a commodity is an economic good or service that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them.

New!!: Hedge (finance) and Commodity · See more »

Commodity market

A commodity market is a market that trades in primary economic sector rather than manufactured products.

New!!: Hedge (finance) and Commodity market · See more »

Commodity risk

Commodity risk refers to the uncertainties of future market values and of the size of the future income, caused by the fluctuation in the prices of commodities.

New!!: Hedge (finance) and Commodity risk · See more »

Competition

Competition is, in general, a contest or rivalry between two or more entities, organisms, animals, individuals, economic groups or social groups, etc., for territory, a niche, for scarce resources, goods, for mates, for prestige, recognition, for awards, for group or social status, or for leadership and profit.

New!!: Hedge (finance) and Competition · See more »

Contract

A contract is a promise or set of promises that are legally enforceable and, if violated, allow the injured party access to legal remedies.

New!!: Hedge (finance) and Contract · See more »

Covered interest arbitrage

Covered interest arbitrage is an arbitrage trading strategy whereby an investor capitalizes on the interest rate differential between two countries by using a forward contract to cover (eliminate exposure to) exchange rate risk.

New!!: Hedge (finance) and Covered interest arbitrage · See more »

Credit risk

A credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments.

New!!: Hedge (finance) and Credit risk · See more »

Currency

A currency (from curraunt, "in circulation", from currens, -entis), in the most specific use of the word, refers to money in any form when in actual use or circulation as a medium of exchange, especially circulating banknotes and coins.

New!!: Hedge (finance) and Currency · See more »

Derivative (finance)

In finance, a derivative is a contract that derives its value from the performance of an underlying entity.

New!!: Hedge (finance) and Derivative (finance) · See more »

Discounts and allowances

Discounts and allowances are reductions to a basic price of goods or services.

New!!: Hedge (finance) and Discounts and allowances · See more »

Diversification (finance)

In finance, diversification is the process of allocating capital in a way that reduces the exposure to any one particular asset or risk.

New!!: Hedge (finance) and Diversification (finance) · See more »

Electricity market

In economic terms, electricity (both power and energy) is a commodity capable of being bought, sold, and traded.

New!!: Hedge (finance) and Electricity market · See more »

Employee stock option

An employee stock option (ESO) is commonly viewed as a complex call option on the common stock of a company, granted by the company to an employee as part of the employee's remuneration package.

New!!: Hedge (finance) and Employee stock option · See more »

Energy derivative

An energy derivative is a derivative contract based on (derived from) an underlying energy asset, such as natural gas, crude oil, or electricity.

New!!: Hedge (finance) and Energy derivative · See more »

Equity risk

Equity risk is "the financial risk involved in holding equity in a particular investment".

New!!: Hedge (finance) and Equity risk · See more »

Exchange-traded fund

An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks.

New!!: Hedge (finance) and Exchange-traded fund · See more »

FASB 133

Launched prior to the millennium, (and subsequently amended) FAS 133 Accounting for Derivative Instruments and Hedging Activities provided an "integrated accounting framework for derivative instruments and hedging activities.".

New!!: Hedge (finance) and FASB 133 · See more »

Financial instrument

Financial instruments are monetary contracts between parties.

New!!: Hedge (finance) and Financial instrument · See more »

Financial market

A financial market is a market in which people trade financial securities and derivatives such as futures and options at low transaction costs.

New!!: Hedge (finance) and Financial market · See more »

Financial risk

Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default.

New!!: Hedge (finance) and Financial risk · See more »

Fixed bill

Fixed bill refers to an energy pricing program in which a consumer pays a predetermined amount for their total energy consumption for a given period.

New!!: Hedge (finance) and Fixed bill · See more »

Foreign exchange hedge

A foreign exchange hedge (also called a FOREX hedge) is a method used by companies to eliminate or "hedge" their foreign exchange risk resulting from transactions in foreign currencies (see foreign exchange derivative).

New!!: Hedge (finance) and Foreign exchange hedge · See more »

Foreign exchange market

The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies.

New!!: Hedge (finance) and Foreign exchange market · See more »

Foreign exchange risk

Foreign exchange risk (also known as FX risk, exchange rate risk or currency risk) is a financial risk that exists when a financial transaction is denominated in a currency other than that of the base currency of the company.

New!!: Hedge (finance) and Foreign exchange risk · See more »

Forward contract

In finance, a forward contract or simply a forward is a non-standardized contract between two parties to buy or to sell an asset at a specified future time at a price agreed upon today, making it a type of derivative instrument.

New!!: Hedge (finance) and Forward contract · See more »

Forward rate agreement

In finance, a forward rate agreement (FRA) is an interest rate derivative (IRD).

New!!: Hedge (finance) and Forward rate agreement · See more »

Fuel price risk management

A specialization of both financial risk management and oil price analysis – and similar to conventional risk management practice – fuel price risk management is a continual cyclic process that includes risk assessment, risk decision making, and the implementation of risk controls.

New!!: Hedge (finance) and Fuel price risk management · See more »

Fungibility

In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable.

New!!: Hedge (finance) and Fungibility · See more »

Futures contract

In finance, a futures contract (more colloquially, futures) is a standardized forward contract, a legal agreement to buy or sell something at a predetermined price at a specified time in the future.

New!!: Hedge (finance) and Futures contract · See more »

Futures exchange

A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future.

New!!: Hedge (finance) and Futures exchange · See more »

Hard currency

Hard currency, safe-haven currency or strong currency is any globally traded currency that serves as a reliable and stable store of value.

New!!: Hedge (finance) and Hard currency · See more »

Hedge accounting

Hedge accounting is an accountancy practice, the aim of which is to provide an offset to the mark-to-market movement of the derivative in the profit and loss account.

New!!: Hedge (finance) and Hedge accounting · See more »

Hedge fund

A hedge fund is an investment fund that pools capital from accredited individuals or institutional investors and invests in a variety of assets, often with complex portfolio-construction and risk-management techniques.

New!!: Hedge (finance) and Hedge fund · See more »

Hurricane Katrina

Hurricane Katrina was an extremely destructive and deadly Category 5 hurricane that caused catastrophic damage along the Gulf coast from central Florida to Texas, much of it due to the storm surge and levee failure.

New!!: Hedge (finance) and Hurricane Katrina · See more »

IAS 39

IAS 39: Financial Instruments: Recognition and Measurement is an international accounting standard for financial instruments released by the International Accounting Standards Board (IASB).

New!!: Hedge (finance) and IAS 39 · See more »

Immunization (finance)

In finance, interest rate immunization, as developed by Frank Redington is a strategy that ensures that a change in interest rates will not affect the value of a portfolio.

New!!: Hedge (finance) and Immunization (finance) · See more »

Insurance

Insurance is a means of protection from financial loss.

New!!: Hedge (finance) and Insurance · See more »

Insurance policy

In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay.

New!!: Hedge (finance) and Insurance policy · See more »

Interest rate

An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited or borrowed (called the principal sum).

New!!: Hedge (finance) and Interest rate · See more »

Interest rate parity

Interest rate parity is a no-arbitrage condition representing an equilibrium state under which investors will be indifferent to interest rates available on bank deposits in two countries.

New!!: Hedge (finance) and Interest rate parity · See more »

Interest rate risk

Interest rate risk is the risk that arises for bond owners from fluctuating interest rates.

New!!: Hedge (finance) and Interest rate risk · See more »

Interest rate swap

In finance, an interest rate swap (IRS) is an interest rate derivative (IRD).

New!!: Hedge (finance) and Interest rate swap · See more »

Iraq War

The Iraq WarThe conflict is also known as the War in Iraq, the Occupation of Iraq, the Second Gulf War, and Gulf War II.

New!!: Hedge (finance) and Iraq War · See more »

Jet fuel

Jet fuel, aviation turbine fuel (ATF), or avtur, is a type of aviation fuel designed for use in aircraft powered by gas-turbine engines.

New!!: Hedge (finance) and Jet fuel · See more »

Liquidity risk

Liquidity risk is a financial risk that for a certain period of time a given financial asset, security or commodity cannot be traded quickly enough in the market without impacting the market price.

New!!: Hedge (finance) and Liquidity risk · See more »

List of commodity traders

Commodity traders are people or companies who speculate and trade in commodities as diverse as metals and spices.

New!!: Hedge (finance) and List of commodity traders · See more »

Long (finance)

In finance, a long position in a financial instrument, means the holder of the position owns a positive amount of the instrument.

New!!: Hedge (finance) and Long (finance) · See more »

Long/short equity

Long/short equity is an investment strategy generally associated with hedge funds, and more recently certain progressive traditional asset managers.

New!!: Hedge (finance) and Long/short equity · See more »

Market neutral

An investment strategy or portfolio is considered market-neutral if it seeks to avoid some form of market risk entirely, typically by hedging.

New!!: Hedge (finance) and Market neutral · See more »

Maturity (finance)

In finance, maturity or maturity date refers to the final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.

New!!: Hedge (finance) and Maturity (finance) · See more »

Moneyness

In finance, moneyness is the relative position of the current price (or future price) of an underlying asset (e.g., a stock) with respect to the strike price of a derivative, most commonly a call option or a put option.

New!!: Hedge (finance) and Moneyness · See more »

Non-deliverable forward

In finance, a non-deliverable forward (NDF) is an outright forward or futures contract in which counterparties settle the difference between the contracted NDF price or rate and the prevailing spot price or rate on an agreed notional amount.

New!!: Hedge (finance) and Non-deliverable forward · See more »

Option (finance)

In finance, an option is a contract which gives the buyer (the owner or holder of the option) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on a specified date, depending on the form of the option.

New!!: Hedge (finance) and Option (finance) · See more »

Outline of finance

The following outline is provided as an overview of and topical guide to finance: Finance – addresses the ways in which individuals and organizations raise and allocate monetary resources over time, taking into account the risks entailed in their projects.

New!!: Hedge (finance) and Outline of finance · See more »

Over-the-counter (finance)

Over-the-counter (OTC) or off-exchange trading is done directly between two parties, without the supervision of an exchange.

New!!: Hedge (finance) and Over-the-counter (finance) · See more »

Pairs trade

The pairs trade or pair trading is a market neutral trading strategy enabling traders to profit from virtually any market conditions: uptrend, downtrend, or sideways movement.

New!!: Hedge (finance) and Pairs trade · See more »

Partial derivative

In mathematics, a partial derivative of a function of several variables is its derivative with respect to one of those variables, with the others held constant (as opposed to the total derivative, in which all variables are allowed to vary).

New!!: Hedge (finance) and Partial derivative · See more »

Petroleum

Petroleum is a naturally occurring, yellow-to-black liquid found in geological formations beneath the Earth's surface.

New!!: Hedge (finance) and Petroleum · See more »

Portfolio (finance)

In finance, a portfolio is a collection of investments held by an investment company, hedge fund, financial institution or individual.

New!!: Hedge (finance) and Portfolio (finance) · See more »

Precious metal

A precious metal is a rare, naturally occurring metallic chemical element of high economic value.

New!!: Hedge (finance) and Precious metal · See more »

Profit (economics)

In economics, profit in the accounting sense of the excess of revenue over cost is the sum of two components: normal profit and economic profit.

New!!: Hedge (finance) and Profit (economics) · See more »

Protective put

A protective put, or married put, is a portfolio strategy where an investor buys shares of a stock and, at the same time, enough put options to cover those shares.

New!!: Hedge (finance) and Protective put · See more »

Put option

In finance, a put or put option is a stock market device which gives the owner of a put the right, but not the obligation, to sell an asset (the underlying), at a specified price (the strike), by a predetermined date (the expiry or maturity) to a given party (the seller of the put).

New!!: Hedge (finance) and Put option · See more »

Risk

Risk is the potential of gaining or losing something of value.

New!!: Hedge (finance) and Risk · See more »

Risk management

Risk management is the identification, evaluation, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives) followed by coordinator and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities.

New!!: Hedge (finance) and Risk management · See more »

Risk reversal

In finance, risk reversal (also known as a conversion when an investment strategy) can refer to a measure of the volatility skew or to an investment strategy.

New!!: Hedge (finance) and Risk reversal · See more »

Short (finance)

In finance, a short sale (also known as a short, shorting, or going short) is the sale of an asset (securities or other financial instrument) that the seller does not own.

New!!: Hedge (finance) and Short (finance) · See more »

Southwest Airlines

Southwest Airlines Co. is a major United States airline headquartered in Dallas, Texas, and the world’s largest low-cost carrier.

New!!: Hedge (finance) and Southwest Airlines · See more »

Spread trade

In finance, a spread trade (also known as relative value trade) is the simultaneous purchase of one security and sale of a related security, called legs, as a unit.

New!!: Hedge (finance) and Spread trade · See more »

Stock

The stock (also capital stock) of a corporation is constituted of the equity stock of its owners.

New!!: Hedge (finance) and Stock · See more »

Stock market index future

In finance, a stock market index future is a cash-settled futures contract on the value of a particular stock market index, such as the S&P 500.

New!!: Hedge (finance) and Stock market index future · See more »

Stock trader

A stock trader or equity trader or share trader is a person or company involved in trading equity securities.

New!!: Hedge (finance) and Stock trader · See more »

Strike price

In finance, the strike price (or exercise price) of an option is the fixed price at which the owner of the option can buy (in the case of a call), or sell (in the case of a put), the underlying security or commodity.

New!!: Hedge (finance) and Strike price · See more »

Superhedging price

The superhedging price is a coherent risk measure.

New!!: Hedge (finance) and Superhedging price · See more »

Supply and demand

In microeconomics, supply and demand is an economic model of price determination in a market.

New!!: Hedge (finance) and Supply and demand · See more »

Swap (finance)

A swap is a derivative contract where two parties exchange financial instruments.

New!!: Hedge (finance) and Swap (finance) · See more »

Systematic risk

In finance and economics, systematic risk (in economics often called aggregate risk or undiversifiable risk) is vulnerability to events which affect aggregate outcomes such as broad market returns, total economy-wide resource holdings, or aggregate income.

New!!: Hedge (finance) and Systematic risk · See more »

Underlying

In finance, the underlying of a derivative is an asset, basket of assets, index, or even another derivative, such that the cash flows of the (former) derivative depend on the value of this underlying.

New!!: Hedge (finance) and Underlying · See more »

Volatility risk

Volatility risk is the risk of a change of price of a portfolio as a result of changes in the volatility of a risk factor.

New!!: Hedge (finance) and Volatility risk · See more »

Volume risk

Volume risk is a commodity risk which refers to the fact that a player in the commodity market has uncertain quantities of consumption or sourcing, i.e. production of the respective commodity.

New!!: Hedge (finance) and Volume risk · See more »

Wheat

Wheat is a grass widely cultivated for its seed, a cereal grain which is a worldwide staple food.

New!!: Hedge (finance) and Wheat · See more »

Wholesaling

Wholesaling, jobbing, or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional, or other professional business users; or to other wholesalers and related subordinated services.

New!!: Hedge (finance) and Wholesaling · See more »

Widget (economics)

The word widget is a placeholder name for an object or, more specifically, a mechanical or other manufactured device.

New!!: Hedge (finance) and Widget (economics) · See more »

Redirects here:

Hedged bet, Hedger, Hedging Strategy, Hedging corridor, Hedging market, Hedging markets, Hedging strategy, Natural hedge, Tracker Hedging.

References

[1] https://en.wikipedia.org/wiki/Hedge_(finance)

OutgoingIncoming
Hey! We are on Facebook now! »