Delta Hedge

Business / Finance / Delta Hedge: The ratio of the change in price of a call option to the change in price of the underlying stock. Also called the hedge ratio. Applies to derivative products. Measure of the relationship between an option price and the underlying futures contract or stock price. For a call option, a delta of 0.50 means a half-point rise in premium for every dollar that the stock goes up. As options near expiration, in-the-money call option contracts approach a delta of 1.0, while in the money put options approach a delta of -1. See: hedge ratio, neutral hedge.

Hedger

Business / Taxes / Hedger: Hedgers in the futures market try to offset potential price changes in the spot market by buying or selling a futures contract. In general, they are either producers or users of the commodity or finan MORE

Inflation Hedge

Business / Finance / Inflation Hedge: Accounting practices allowing for the effects of inflation. MORE

Hedged Tender

Business / Finance / Hedged Tender: A portfolio consisting of a long position in the stock and a long position in the put option on the stock, so as to be riskless and produce a return that equals the risk-free interest rate. MORE

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