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
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
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...