Hedge ratio: Difference between revisions
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== See also == | == See also == | ||
* [[Dynamic hedging]] | * [[Dynamic hedging]] | ||
* [[Hedge ]] | |||
* [[Hedge accounting]] | |||
* [[Hedging]] | |||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
Revision as of 00:00, 7 July 2022
The proportion of a hedging instrument required to hedge an underlying position, compared with the amount of the underlying position itself.
Example
If four options are required to hedge a position of one unit of the underlying asset:
Hedge ratio = ¼
= 0.25.
