Traders were using a new kind of hedging strategy called portfolio insurance, which involved linking stock prices to the futures index.
If a farmer wants to protect from falling corn and soybean prices, it can lock in the price in the futures market, also a hedging strategy.
The winning submission from MFX Solutions focused on eliminating currency risk for international SME lenders by adopting a proven currency-hedging strategy pioneered in the microfinance industry.
Data from Hedge Fund Research, a consultancy, show that in the second quarter, a share-hedging strategy involving both long and short sales was the most popular in America and Britain.
Things are so gloomy on Wall Street that even the mighty Goldman Sachs (nyse: GS - news - people ) is seen having a lukewarm quarter, barring any stealth hedging strategy that could lift it out of normalcy.
Since first disclosing the loss, Dimon has largely pinned the blame on a hedging strategy gone wrong, a synthetic credit portfolio initially intended to protect the company that became a successful position and blinded those who were in charge of managing it to the rising threat it posed.
"There's both arbitrage and hedging in this strategy, " Harris says.
Sometimes it turns out to be a more profitable strategy than hedging.
On Thursday, we posted a strategy for hedging bets on BIDU into earnings, and that gave us a chance to stay involved in the stock for higher prices while locking in gains from the recent run higher.
The third planned actively managed ETF will be an all equity portfolio strategy that employs option hedging techniques.
"Some natural hedging was always a part of the long-term strategy, but also we have a corporate strategy of having production follow the market, " says Robert Hitt, BMW's manager of public affairs.
You need to understand the managers' strategy in detail, including which risks they're hedging and which risks remain unhedged.
应用推荐