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Derivatives




Hedge and Forget


A hedge strategy in which an investor makes no attempts to adjust the hedge once its has been set up. The hedging investor simply takes a futures position at the beginning of the life of the hedge and closes out the position at the end of its life. In this sense, the hedge and forget is a static hedge that only involves one trade, and as such it minimizes transactions costs over the life of the hedge.

Hedge and forget is opposite to dynamic hedge.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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