ratio hedge

Definition of "ratio hedge"
  1. The comparison of the quantity of options to futures contracts bought or sold to set up a neutral, or delta neutral, hedge
How to use "ratio hedge" in a sentence
  1. The investment bank used a ratio hedge to reduce its exposure to price volatility.
  2. To hedge his investments, John considered using a ratio hedge.
  3. In the volatile commodity market, a ratio hedge is often used to establish a neutral position.

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