Active tail hedging

Protection against large market declines that is adjusted over time, for example by buying, rolling or selling options as prices and volatility change. The aim is to manage the ongoing cost of protection rather than holding a fixed hedge.

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Related terms

Risk measures

• Conditional value at risk
• Customer acquisition cost
• Fat tails
• Long-tail risk
• Regulatory compliance
• Risk management
• Skewness
• Stress testing
• Tail-risk diversifiers
• Value at risk