Tag: hedging

Hedge Clause

What is 'Hedge Clause' A provision included in published financial reports that indemnifies the author, or authors, against any responsibility for any...
Hedge Accounting

Hedge Accounting

What is 'Hedge Accounting' Hedge accounting is a method of accounting where entries for the ownership of a security and the opposing hedge are treated...

Quantity-Adjusting Option (Quanto Option)

What is 'Quantity-Adjusting Option - Quanto Option' A cash-settled, cross-currency derivative in which the underlying asset is denominated in a currency other...

Vanilla Option

What is a 'Vanilla Option' A vanilla option is a financial instrument that gives the holder the right, but not the obligation,...

Vega Neutral

What is 'Vega Neutral' A method of managing risk in options trading by establishing a hedge against the implied volatility of the...

Gamma Pricing Model

What is 'Gamma Pricing Model' An equation for determining the fair market value of a European-style option when the price movement on...

Gamma Neutral

What is 'Gamma Neutral' A method of managing risk in options trading by establishing an asset portfolio whose delta rate of change...

Gamma

What is 'Gamma' Gamma is the rate of change in an option's delta per 1-point move in the underlying asset's price. Gamma...

De-hedge

What is 'De-hedge' The process of closing out positions that were originally put in place to act as a hedge in one's...
underlying asset

Underlying Asset

What is an 'Underlying Asset' An underlying asset is the security or commodity underlying a Derivative. The most common type of derivative is a futures...

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