For instance, Barclays recommends savvy derivatives trades like swaps and short-term hedging strategies that focus on spreads between bond maturities.

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Alternatively, strategists could be hedging short positions in the stock, reducing the cost of protection by establishing call spreads rather than simply buying calls outright.

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Hedge funds may or may not engage in hedging or short- selling.

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The strategy came about during the meltdown of 2008, when correlations between different assets surged and Warren found that every effort he made to protect client assets had its own drawbacks, chief among them the cost of hedging by going short the market or jumping in and out of holdings.

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An expansion in the short-term yield differentials would make currency hedging more expensive for life insurers.

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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.

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The Alternative Strategies Fund focuses on a stock hedging asset class, or a stock long-short.

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Bernstein analyst Steve Powers said Coca-Cola and Pepsi are known to be conservative when it comes to buying and hedging commodities risk, making them less subject to short-term volatility.

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With call buying rising in tandem with short-selling, it could be a sign that these bears are hedging their bets against an unexpected rally.

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