Term of the Day: Hedging Transaction

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	INVESTOPEDIA Term Of The Day August 2, 2015 Hedging Transaction A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging transactions purchase opposite positions in the market in order to ensure a certain amount of gain or loss on a trade. They are employed by portfolio managers to reduce portfolio risk and volatility or lock in profits. Investopedia Explains: Hedging transactions are subject to ordinary gain and loss tax treatment. However, hedging losses of limited partners are usually... Read More Related to "Hedging Transaction" Taking A Look Behind Hedge Funds Once dismissed as secretive, risky and only for the well-heeled, hedge funds represent a growth industry. They can promise higher-than-average... Read More Massive Hedge Fund Failures The failure of a small hedge fund doesn't come as a particular surprise to anyone in the financial services industry, but the meltdown of... Read More How Companies Use Derivatives To Hedge Risk If you are considering a stock investment and you read that the company uses derivatives to hedge some risk, should you be... Read More Recently Added Definitions Reinstatement Clause An insurance policy clause that states when coverage terms are reset after the insured files a claim. Reinstatement clauses typically do not... Read More Rate On Line The ratio of premium paid to loss recoverable in a reinsurance contract. Rate on line (ROL) represents how much an insurer has to... Read More Related Definitions Double Hedging Super Hedging Hedge Hedge Ratio Pairs Trade Past Terms of the Day Bogey Xetra Nuncupative Will OsMA Unfair Claims Practice You are currently subscribed as: mondemand.forex@blogger.com Unsubscribe | Unsubscribe From All | Manage Profile Investopedia US, A Division of IAC. Copyright © 2015, Investopedia, LLC. All Rights Reserved Follow Us: