ARTICLE SYNOPSIS...Hedging With Spreads by Bradley J. Horn A risk manager may prefer the flexibility and limited risk of a call or put strategy. The trader, however, may feel that the premium costs associated with outright option positions are too expensive. These cash fl
ARTICLE SYNOPSIS...Industry-specific news affects stock prices. Therefore, adding the industry beta to the classical hedging model based on the market beta can considerably improve the efficiency of stock hedging. We'll explain how