|
|
| Discuss query about Hedgeing at the Stocks & Shares within the Traderji.com - Discussion forum for Stocks Commodities & Forex; please tell me about hedgeing.how it is done? is it possible to hedge your position ... |
|
|||||||
| Notices |
| Stocks & Shares Discuss technical & fundamental views, trading and investing strategies on individual stocks. |
 |
|
|
Thread Tools |
| Sponsored Links |
|
#1
16th August 2004, 03:48 PM
|
|||
|
|||
query about Hedgeing
please tell me about hedgeing.how it is done? is it possible to hedge your position between future & option OR between option & option(example-buy call & sell put of perticular stock).please explain.with real time example it will be great.
also suggest useful sites & books. 
|
|
#2
16th August 2004, 04:09 PM
|
|||
|
|||
|
Re: query about Hedgeing
Hedging is a way of reducing some or all of the risk involved in holding an investment. A hedge is just a way of insuring an investment against risk.
Consider a simple (perhaps the simplest) case. Much of the risk in holding any particular stock is market risk; i.e. if the market falls sharply, chances are that any particular stock will fall too. So if you own a stock with good prospects but you think the stock market is weak, then you may be interested to hedge your position. There are many ways of hedging against market risk. The simplest and easy method, is to buy a put option or sell stock futures for the stock you own. (In this case you're buying insurance not only against market risk but against the risk of the specific security as well.) Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge). Other alternative methods using options exist. You can read more on option trading strategies at http://www.traderji.com/a/ You could also read more on dynamic hedging strategies at http://finance.wharton.upenn.edu/~be...mma/MiER71.pdf
|
| Sponsored Links |
|
|
|
| Bookmarks |
| Thread Tools | |
|
|
Similar Threads for: query about Hedgeing
|
||||
| Thread | Thread Starter | Forum | Replies | Last Post |
| Query about arbitrage? | minukrishna | Equities | 44 | 18th August 2008 11:46 AM |
| Hedgeing in options | ashkbag | Options | 8 | 23rd October 2004 08:09 PM |
Indemnity, Disclaimer & Disclosure
Notice:
• By visiting Traderji.com you indicate your acceptance of our Forum
Rules Disclaimer & Disclosure and indemnify Traderji.com, its
associates and related parties of all claims howsoever resulting from
the usage of the forum.
• Disclaimer: Trading or investing in stocks & commodities
is a high risk activity. Any action you choose to take in the markets
is totally your own responsibility. Traderji.com will not be liable for
any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information.
• Disclosure: The information in this forum is neither an offer to sell nor solicitation to buy any of the securities mentioned herein.
The writers may or may not be trading in the securities mentioned.
• All names or products mentioned are trademarks or registered trademarks of their respective owners.
General Content Disclaimer Notice:
In light of our policy of encouraging candid, open exchanges of views and the rapid distribution of information originating from many sources, Traderji.com cannot determine the accuracy of information that may be uploaded to the forum. Opinions, advice and all other information expressed by participants in discussions are those of the author. You rely on such information at your own risk. You are urged to seek professional advice for specific, individual situations and not rely solely on advice or opinions given in the discussions. Since Traderji.com is an open and free discussion forum, any comments made by members of this forum in their posts reflect their own views and not of the owner or administrator of Traderji.com. Thus the owner/administrator indemnify themselves of all claims whatsoever and will not be liable or responsible for any members comments/views in this forum Traderji.com. If you find any objectionable or offensive posts made by members of this forum which you would like to bring to our notice for removal then please Contact Us.
