Beta hedging

The beta hedging is an indirect hedging method for those stocks for which no put options on futures are available.

Since share price movements are largely determined by the performance of the overall market (which is represented by the index), investors make do with so-called index puts in these cases. By determining the subscription ratio of index puts to the share, a relatively good partial hedge against the share price risk is achieved, but not a perfect hedge (“ perfect hedge ”).

Web links

• Beta hedging in the stock exchange lexicon on broker-test.de
• Beta hedging on boersennews.de

literature

• Beta hedging. In: Hans G. Linder, Volker Tietz: Das große Börsenlexikon. FinanzBook Verlag, Munich 2008, p. 38 ( on Google Books )
• Christian Eck, Matthias Riechert, Matthias S. Riechert: Professional Eurex trading: Basics, strategies and opportunities with options and futures. FinanzBook Verlag, Munich 2006, from p. 294 ( on Google Books )