Hedging

Discussion in 'Educational Resources' started by kmiklas, Jul 9, 2021.

  1. kmiklas

    kmiklas

    Can anyone recommend a good learning resource on hedging? Ty --Keith
     
  2. What are you trying to hedge?
     
  3. easymon1

    easymon1

    zghorner likes this.
  4. The concept of hedging is based upon the idea of having a cleaner exposure to what you are betting on.

    For example, say you think stock A is poised to rally. However, you may think that stocks in general are in a bear market. In this case, you would want to hedge out equity beta, while being long your stock. So you’d go long stock A / short market index.

    You can do this with increasing granularity to hedge out sector and factor risks.
     
  5. kmiklas

    kmiklas

    U.S. Equities - Pattern Day Trading
     
    easymon1 likes this.
  6. kmiklas

    kmiklas

    Right... is there a good book or something on this? I want to learn more.
     
  7. easymon1

    easymon1

    kmiklas likes this.
  8. ajacobson

    ajacobson

    State of the art hedging today - go to google and search Crisis Alpha.
     
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  9. easymon1

    easymon1

    hedging Crisis Alpha - search
    https://duckduckgo.com/?q=hedging+Crisis+Alpha&t=h_&ia=web

    https://hedgenordic.com/2021/03/secrets-of-long-livers-crisis-alpha/
    "My Ph.D. dissertation finds that long-surviving Nordic equity hedge funds generated alpha during both crisis and non-crisis periods, particularly during severe crises."
    " . . . On the other hand, highly skilled fund managers with solid crisis management experience are taking advantage of the low prices,
    applying more exotic strategies, and delivering higher returns."

    hedging exotic strategies day trading - search
    https://duckduckgo.com/?q=hedging+exotic+strategies+day+trading&t=h_&ia=web

    hedging exotic strategies
    https://duckduckgo.com/?q=hedging+exotic+strategies&t=h_&ia=web

    sail.jpg
     
    Last edited: Jul 10, 2021
    kmiklas likes this.
  10. Yes — pick up a textbook on investment management and portfolio theory. Fundamentally, the topics you want to study are asset pricing models (capm, apt, fama-French, etc.), and then move onto portfolio management (optimizing risk and return, hedging, etc.

    Once you understand pricing models you can apply it to any stock to observe what’s driving price. From there you can build a hedging strategy.
     
    #10     Jul 10, 2021