Static hedge
A hedge that does not have to be changed once it is initiated. |
Similar financial terms
Static options replicationA static options replication is a procedure for hedging a portfolio that involves finding another portfolio of approximately equal value on some boundrary.
Static theory of capital structure
Theory that the firm's capital structure is determined by a trade-off of the value of tax shields against the costs of bankruptcy.
Hedge ratio
The percentage of the position in an asset that is hedged with derivatives.
Additional hedge
A protection against borrower fallout risk in the mortgage pipeline.
Short hedge
The sale of a futures contract(s) to eliminate or lessen the possible decline in value ownership of an approximately equal amount of the actual financial instrument or physical commodity.
Perfect hedge
A financial result in which the profit and loss from the underlying asset and the hedge position are equal.
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.
Long hedge
The purchase of a futures contract(s) in anticipation of actual purchases in the cash market. Used by processors or exporters as protection against an advance in the cash price.
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the underlying stock, designed so that one position will help offset any unfavorable price movement in the other, including covered call writing and protective put buying.
