DISCLAIMER: The definitions in this Glossary are for educational purposes only. They do not replace in any way the definitions used in local and global self-regulatory and regulatory codes and standards. The definitions in this Glossary do not in any way constitute advice. In no event shall Assure Hedge be liable for losses or damages arising from the use of information presented in this Glossary. We make every effort to ensure, but do not guarantee, the accuracy of the information in this Glossary. Information may contain technical inaccuracies or typographical errors. All content and information in this Glossary can be changed or updated without notice. If you find any inaccuracies or omissions in this Glossary, please let us know.

Derivative

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Discover other concepts in our
currency hedging glossary

Hedge

A hedge is an investment that you make in order to manage your risk. When you hedge, you’re minimising or offsetting the possibility you’ll lose money should things go wrong.

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Arbitrage

Arbitrage simply means exploiting price variations in different markets. In forex trading, this typically entails buying foreign currency – or a derivative such as an option or forward – in one market, and selling it at a profit in another market.

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Straddle

A straddle is a strategy that traders typically use when they want to bet on the price of an asset but aren’t sure if it’s likely to go up or down — if they are buying the straddle, or have a high conviction that the price will remain stable — if they sell the straddle.

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