Perfect hedge

Perfect hedge
A financial result in which the profit and loss from the underlying asset and the hedge position are equal. ...

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Perfect hedge
A situation in which the profit and loss from the underlying asset and the hedge position are equal.

Perfect Hedge
A position undertaken by an investor that would eliminate the risk of an existing position, or a position that eliminates all market risk from a portfolio.

perfect hedge A hedge that eliminates the risk of another investment. perfect title A title that is free of liens and legal questions as to ownership of the property,... perfecting title The correction of flaws or defects in a title.

A perfect hedge eliminates risk entirely. Hedging strategies lower return since there is a cost involved in hedging.

A perfect hedge is one that eliminates the possibility of future gain or loss.

If our trader wanted a more perfect hedge, she would go out and negotiate an actual deposit commencing immediately and maturing on December 15. Arranging such a customized deal would take time, and she would have to pay a bid-ask spread.

Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge).

Owning stocks in sectors like utilities and other industries whose revenues (and by extension distributable profits) are tied to inflation can act as a near perfect hedge since as inflation goes up so do utility bills; ...

Graph of a slope that matches the forecast of an exchange rate with the actual exchange rate.
Perfect hedge
A situation in which the profit and loss from the underlying asset and the hedge position are equal.
Perfect market assumptions ...

Strategy used to offset investment risk, typically from adverse movements in interest rates or securities prices. A perfect hedge is one eliminating the possibility of future gain or loss.
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Hedge/Hedging A strategy used to help offset investment risk. A perfect hedge is one eliminating the possibility of future gain or loss.

A European option would not provide a perfect hedge since the average price on the receipts would be different then the rate that the option is exercised against, namely spot at maturity of the option.

See also: Transaction costs, Expense, Banks, Capital structure, Values