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Cross Hedging Risk

The risk that arises in case of hedging an asset with another using futures while the two are not identical...

Cross Hedging

Hedging a cash (spot) commodity or security with a futures contract where the underlying commodity is similar but not identical...

Cross Hedge

The hedge that involves using a cash (spot) commodity or security with a futures contract where the underlying commodity is...

Bona Fide Hedge

A hedging transaction that meets a host of conditions for qualification as bona fide hedge. The transaction must (1) represent...

Horizontal Risk

The risk that arises from inability of a hedger/ portfolio manager to hedge against a change in the shape of...

Yield Curve Risk

The risk that arises from inability of a hedger/ portfolio manager to hedge against a change in the shape of...

Curve Risk

The risk that arises from inability of a hedger/ portfolio manager to hedge against a change in the shape of...

Interest Rate Risk

Generally, it is the risk that arises from changes in interest rate which impact the value of interest-bearing securities/ investments...

Hedging

Taking an opposite or offsetting position in a derivative instrument or any other type of financial instruments with regard to...

Tailing Adjustment

An adjustment that is made to the number of futures contracts used in hedging a position in order to accommodate...