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  2. Hedge (finance) - Wikipedia

    en.wikipedia.org/wiki/Hedge_(finance)

    A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insurance, forward contracts, swaps, options, gambles, [1] many types of over-the-counter and derivative products, and futures contracts.

  3. Vanna–Volga pricing - Wikipedia

    en.wikipedia.org/wiki/Vanna–Volga_pricing

    The rationale behind the above formulation of the Vanna-Volga price is that one can extract the smile cost of an exotic option by measuring the smile cost of a portfolio designed to hedge its Vanna and Volga risks. The reason why one chooses the strategies BF and RR to do this is because they are liquid FX instruments and they carry mainly ...

  4. Superhedging price - Wikipedia

    en.wikipedia.org/wiki/Superhedging_price

    The superhedging price is a coherent risk measure.The superhedging price of a portfolio (A) is equivalent to the smallest amount necessary to be paid for an admissible portfolio (B) at the current time so that at some specified future time the value of B is at least as great as A.

  5. Hedge fund - Wikipedia

    en.wikipedia.org/wiki/Hedge_fund

    A hedge fund is a pooled investment fund that holds liquid assets and that makes use of complex trading and risk management techniques to improve investment performance and insulate returns from market risk.

  6. Hedge accounting - Wikipedia

    en.wikipedia.org/wiki/Hedge_Accounting

    For a cash flow hedge, some of the derivative volatility is placed into a separate component of the entity's equity called the cash flow hedge reserve. Where a hedge relationship is effective (meets the 80%–125% rule), most of the mark-to-market derivative volatility will be offset in the profit and loss account. Hedge accounting entails much ...

  7. Hedge relationship - Wikipedia

    en.wikipedia.org/wiki/Hedge_relationship

    Testing must be performed on both elements of the hedge relationship to ensure that the risk mitigation value of the hedge would be effectively reflected in the insurees profit and loss ledger. "Effectiveness" measures the strength of this relationship; there are several [2] [3] generally accepted "measures of effectiveness":

  8. Stack - Wikipedia

    en.wikipedia.org/wiki/Stack

    Stack machine, an architecture centered around a pushdown stack; Protocol stack, a particular software implementation of a computer networking protocol suite; Solution stack, a group of software systems, increasing in abstraction from bottom to top; Stack-based memory allocation, a memory allocation scheme based on the principle of "last in ...

  9. Black–Scholes model - Wikipedia

    en.wikipedia.org/wiki/Black–Scholes_model

    The main principle behind the model is to hedge the option by buying and selling the underlying asset in a specific way to eliminate risk. This type of hedging is called "continuously revised delta hedging" and is the basis of more complicated hedging strategies such as those used by investment banks and hedge funds.