Overhedging - Revision history

imported>Doug Williamson: Remove surplus link.

2019-02-09T20:23:45Z

Remove surplus link.

2015-12-04T14:31:31Z

Standardise example titles

← Older revision		Revision as of 14:31, 4 December 2015
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	Overhedging is a form of speculation.		Overhedging is a form of speculation.


	It means intentionally hedging an amount GREATER THAN the total related risk exposure, for example by the use of a derivative instrument with a principal amount of 200% of the related risk exposure.		It means intentionally hedging an amount GREATER THAN the total related risk exposure, for example by the use of a derivative instrument with a principal amount of 200% of the related risk exposure.
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	~~For example in this~~ case the size of the new speculative position is 200% - 100% = 100%.		<span style="color:#4B0082">'''Example: Overhedging'''</span>

			In the case above, the size of the new speculative position is 200% - 100% = 100%.

	In other words equal in size to the original exposure being hedged.		In other words equal in size to the original exposure being hedged.

2014-11-22T16:25:02Z

Link with MCT page.

2014-08-13T12:12:28Z

Categorise the page

2014-08-12T14:25:14Z

Categorise the page

2014-08-12T14:24:43Z

Categorise the page

2013-08-21T14:44:38Z

Removed italic/bold, spacing 21/8/13

← Older revision		Revision as of 14:44, 21 August 2013
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	~~"'''~~Overhedging~~'''"~~ is a form of speculation.		Overhedging is a form of speculation.

	It means intentionally hedging an amount GREATER THAN the total related risk exposure, for example by the use of a derivative instrument with a principal amount of 200% of the related risk exposure. The effect of overhedging in this way is to create a new purely speculative position in the derivative instrument.		It means intentionally hedging an amount GREATER THAN the total related risk exposure, for example by the use of a derivative instrument with a principal amount of 200% of the related risk exposure.

			The effect of overhedging in this way is to create a new purely speculative position in the derivative instrument.

	The size of the new speculative position is equal to the excess of the principal amount hedged, over 100%.		The size of the new speculative position is equal to the excess of the principal amount hedged, over 100%.
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	For example in this case the size of the new speculative position is 200% - 100% = 100%.		For example in this case the size of the new speculative position is 200% - 100% = 100%.

	In other words equal in size to the original exposure being hedged.		In other words equal in size to the original exposure being hedged.


	The new speculative position is in the opposite direction to the original exposure.		The new speculative position is in the opposite direction to the original exposure.

2012-12-19T16:54:20Z

completed definition from Glossary; added See Also

← Older revision		Revision as of 16:54, 19 December 2012
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	"Overhedging" is a form of speculation.		"'''Overhedging'''" is a form of speculation.

	It means intentionally ""hedging"" an amount GREATER THAN the total related risk exposure		It means intentionally hedging an amount GREATER THAN the total related risk exposure, for example by the use of a derivative instrument with a principal amount of 200% of the related risk exposure. The effect of overhedging in this way is to create a new purely speculative position in the derivative instrument.

			The size of the new speculative position is equal to the excess of the principal amount hedged, over 100%.


			For example in this case the size of the new speculative position is 200% - 100% = 100%.
			In other words equal in size to the original exposure being hedged.


			The new speculative position is in the opposite direction to the original exposure.


			== See also ==
			* [[Hedging]]
			* [[Underhedging]]

2012-10-23T14:20:14Z

CSV import

New page

"Overhedging" is a form of speculation.

It means intentionally ""hedging"" an amount GREATER THAN the total related risk exposure