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Questions tagged [hedge]

A hedge is an investment to reduce the risk of adverse price movements in an asset.

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Is crypto an uncorrelated (or negatively correlated to traditional markets) asset class?

In preparation for an upcoming financial crisis, for instance, something of the magnitude of the 2008's capital C crisis, would crypto (given their current market size and state) be (part of) a good ...
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How exactly is a “replicating portfolio” a “hedge”?

Let us say that there is some stock which a year from now will have some value V. A replicating portfolio is a portfolio which will always equal V a year from now. Clearly, both the stock and the ...
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FX hedging with rolling FX forwards

I am considering investing in an overseas hedge fund which claims that the cost of hedging the FX risk is just the FX points of the quarterly fx forwards. The question is: when rolling the contracts ...
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construct an option portfolio on a single asset that is both Long Gamma and short vega [closed]

everyone, I have come across this question. How can we construct a portfolio that is both Long Gamma and short Vega and how do we actually hedge long Gamma/short vega position?
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Portfolio choices to hedge the risk of a real estate property

Let's say there's an individual who owns a condominium apartment in a US city, which is being rented out to a tenant. There's still a mortgage owed on the apartment, but there's positive net equity ...
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Are Credit Default Swaps an adequate hedge for leveraged bond portfolio?

A hedge is supposed to be a cheaper bet that pays off if a primary bet isn't profitable. With a leveraged bond portfolio, my understanding is that a credit default swap (CDS) can help hedge, but I'm ...
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I am trying to start a “hedge fund,” and by that, I really just mean I have a very specific and somewhat simple investment thesis that I want to

basically, I have a few stocks in mind that I want to sell short, so it will likely be just me, possibly one or two other people working very part-time, and that's about it. In any event, I will need ...
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How do currency ETFs track the spot prices? And which amount one has to invest for full hedge?

I've got a couple of doubts about how currency ETFs work. How do they track the spot price? For example, I was checking the FX pair GBPUSD, I've seen: Spot price GBPUSD: $1.5382 ETF long GBP short ...
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Is investing in housing considered an adequate hedge against inflation?

Does the price of a home or apartment generally increase, at least, with the rate of inflation in the United States? Could such a purchase be viewed as effective protection against inflation?
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What variety of hedges are there against index funds of U.S. based stocks?

I am a 25 year old investor and I want to build long-term wealth. Right now, I am trying to be tax efficient and am using a buy and hold approach. (My 401k contributions are maxed out each year and ...
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In a hedge fund, what is a “Partner”?

I will be meeting with representatives of a hedge fund (doing HFT FX trading), one of whom is titled "Partner". In the context of a hedge fund, what is the role of a "Partner"?
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How can I hedge against local home value?

I'd like to hedge against my neighborhood home value. I'm not terribly concerned if the overall housing market fluctuates, since if I move and sell my home for less, I can buy a new home for less. I'...
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Is there an advantage to international stock diversfication?

I'd like to reduce my risk of investing solely in the U.S. stock market compared to the rest of the world. However, my concern is that perhaps the U.S. stock market already has such international ...
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What is the opposite of a hedge?

As an example of what I mean, when you buy a stock but are afraid that it might go down, you "hedge" your bet. What is the opposite of a hedge? In other words, what do you do if you are convinced it ...
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How do hedge funds work?

I understand the basic idea of hedging - buying contracts on something today hoping it will help flatten costs over the long run (eg what Southwest did in the late 90s and early 00s when they bought ...