Preview

hedging strategy

Good Essays
Open Document
Open Document
1011 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
hedging strategy
India which is known for I.T services around the world, among the companies that provide these famous it services Infosys is one among them. In other words Infosys can be said as the jewel of the Indian Silicon Valley because of the revenue that brings to the country.
Hedging strategies are various ways of financial plans that permit an organisation to avoid undesirable price rise and fall in one market by launching an opposite point in a altered market. The general objective is to point of confinement the measure of danger confronted when putting resources into diverse sorts of securities. Various fiscal vehicles exist to profit speculators intrigued by supporting the shots of a substantial misfortune in businesses. These incorporate diverse sorts of choices, advances, swaps and protection. By and large, supporting methodologies include the station of multifaceted investments to keep the misfortune.
Among The hedging strategies that are used by the Infosys few are Leverage, Long Only.
Leverage is a hedging strategy which means obtained cash, is to a greater extent a strategy than a procedure. The utilization of power has been one of the best and most exceedingly awful strategies utilized by multifaceted investments in the course of recent years. At the point when done right, and utilized within a sensible way, solid exchanging or venture returns are expanded by the additional cash that is given something to do. At the point when done wrong, power can worsen an offer off as the flexible investments gets edge calls and is compelled to offer positions to reach them. Some flexible investments have utilized power as high as or higher than 100 to one. As such, for each dollar they oversee, they get $100. That might be hazardous if the business sector betrays you, paying little heed to the advantage class.
Long only is a hedging stragies flexible investments possesses long positions in stocks and/or different possessions, fundamentally searching for alpha to the

You May Also Find These Documents Helpful

  • Satisfactory Essays

    This week, I will discuss my findings from the authoritative sources that relate to the case and then apply those concepts and explain how they relate to the case directly. Since the Controller of Thomas Foods is inexperienced with regards to accounting for hedging strategies, I have been asked to provide examples of different hedging strategies and explain how each example is implemented as well as how it is accounted for.…

    • 593 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Typically, hedging strategies are implemented as a means of protection. The dictionary tells us that hedging strategies involve making counterbalancing investments in order to avoid a loss. With regards to the futures market, hedging strategies involve a position in the market that is the opposite of an entity’s current position. Any gain or loss in the cash market is usually followed by a counterbalanced effect in the futures market since the two markets tend to move up and down together. The counterbalanced movement of the two markets is not necessarily identical, but it is usually enough to mitigate the risk of significant loss in the cash market. Hedging is common for farmers or livestock producers that need protection against price drops in livestock or in crops, and also for protection against price increases on purchased inputs such as fertilizer. Like the farmers seeking hedging strategies to mitigate the risks that come with rising prices of purchased goods, Thomas Foods hopes to do the same for the goods they purchase from the farmers.…

    • 537 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    FINC6015 ASSIGNMENT 2

    • 1784 Words
    • 5 Pages

    Two hedging strategies used in the trading scenario are protective put and covered call. A protective put strategy is a combination of long stock and long put. The main objective of a protective put strategy is to shield the effects of adverse movements of the prices of shares and lower the downside risk. Buying a protective put assures an individual’s maximum cost is a certain amount which will not increase as the stock price decreases. Therefore, the owner of a…

    • 1784 Words
    • 5 Pages
    Better Essays
  • Good Essays

    If an equity portfolio is hedged with the appropriate futures contract sold short, any decline in the value of the equity shares will be offsets by an increase in the value of the future position. If the value of the equity shares rises, the corresponding futures contracts will lose value. At a certain level of futures loss additional deposits will be required to keep the contract open. If the portfolio rises in value, the cost of the hedging will increase in proportion to the portfolio increase.…

    • 834 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Show how transactions in derivatives can be used to either hedge risk or to open speculative positions.…

    • 2782 Words
    • 12 Pages
    Powerful Essays
  • Good Essays

    The following case study reports on a highly successful gold mining company, American Barrick Resource Corporation. We discuss herein the many of the techniques being used in their hedging programs and the variation between such programs.…

    • 2076 Words
    • 9 Pages
    Good Essays
  • Better Essays

    Madoff's Case

    • 1131 Words
    • 5 Pages

    Anonymous. (2000). Sas no. 92-auditing derivative instruments, hedging activities, and investments in securities. Journal of Accountancy, 190(5), 130-142. doi: 63329279…

    • 1131 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    Tiffany Case

    • 524 Words
    • 3 Pages

    This expected positive income puts Tiffany is the long position, which indicates that to balance our risk we would need to consider a short position with respect to the Yen. Over the next three months, the market expects to see the yen appreciating again the dollar and is offering forward rates that are in line with this expectation. These forward rates would put Tiffany in another long position which would not hedge against our exchange risks. Our next option to hedge against any ForEx…

    • 524 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Hedging is the taking of a position, acquiring either a cash flow, an asset, or a contract (e.g., a forward contract) that will rise (fall) in value and offset a fall (rise) in the value of an existing position…

    • 626 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Pine Street Capital

    • 1183 Words
    • 5 Pages

    Levered Portfolio Assets Debt Assets Debt 100 50 200 50 Equity Equity 50 150 ROE = 200%…

    • 1183 Words
    • 5 Pages
    Satisfactory Essays
  • Satisfactory Essays

    When a currency trader enters into a trade with the intent of protecting an existing or anticipated position from an unwanted move in the foreign currency exchange rates, they can be said to have entered into a forex hedge. By utilizing a forex hedge properly, a trader that is long a foreign currency pair, can protect themselves from downside risk; while the trader that is short a foreign currency pair, can protect against upside risk.…

    • 643 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Aifs Case Study

    • 1562 Words
    • 7 Pages

    In the event of the above risks, Tabaczynski considers three alternative strategies with diiferent exchange levels with the price of each hedging strategy incorporated in the calculations.…

    • 1562 Words
    • 7 Pages
    Good Essays
  • Good Essays

    Ans: The long-short products involved holding a portfolio of long positions in combination with a portfolio of short positions. For the long positions, Numeric would buy “good” stocks, and for the short positions, it would sell short “bad” stocks. The firm could exploit its ability to predict losers and winners, a so called “double alpha strategy”. In addition, by matching the broad market and other common exposures of the long and short positions, it could largely eliminate all except stock-specific risks. Certainly, the portfolio would bear the risk that the longs underperformed the shorts.…

    • 646 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Narayan Murthy

    • 709 Words
    • 3 Pages

    In 2006 Infosys has a turnover of more than $ 2billion and has employee strength of over 50,000.…

    • 709 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Rethinking Risk Management

    • 8237 Words
    • 33 Pages

    advantage in bearing some kinds of risks. We examine the implications of this new approach for the…

    • 8237 Words
    • 33 Pages
    Powerful Essays