Dynamic hedging: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Administrator (CSV import) |
imported>Doug Williamson (Identify options context.) |
||
| (2 intermediate revisions by the same user not shown) | |||
| Line 1: | Line 1: | ||
''Options trading and hedging.'' | ''Options trading and hedging.'' | ||
Dynamic hedging recognises that the hedge ratio depends - among other things - on the current market price of the underlying asset. | Dynamic hedging recognises that the hedge ratio depends - among other things - on the current market price of the underlying asset. | ||
So that as the underlying market price changes, the amount of the hedging instrument held needs to be adjusted dynamically, in line with the changing hedge ratio. | So that as the underlying market price changes, the amount of the hedging instrument held needs to be adjusted dynamically, in line with the changing hedge ratio. | ||
== See also == | == See also == | ||
* [[Hedge ratio]] | * [[Hedge ratio]] | ||
* [[Market price]] | * [[Market price]] | ||
* [[Option]] | |||
[[Category:Financial_products_and_markets]] | |||
Latest revision as of 19:51, 7 October 2018
Options trading and hedging.
Dynamic hedging recognises that the hedge ratio depends - among other things - on the current market price of the underlying asset.
So that as the underlying market price changes, the amount of the hedging instrument held needs to be adjusted dynamically, in line with the changing hedge ratio.
