First, I am not surprised that the size of the loss has turned out to be 15% greater than UBS first estimated - because selling or hedging big trading positions in a hurry, as UBS had to do on Friday, is always expensive.
It had one employee too many to be considered a retail customer, so it is not clear whether in future Barclays would be banned from selling this hedging product to the likes of Adcocks or whether the owner Paul Adcock will be able to escape from the financially crippling contract.
The Dow is up 11% this year its best first quarter in 15 years and some money managers have been selling stocks or hedging positions for fear that stocks are overdue for a pullback.
There are other moves you can make as well, such as hedging by selling covered calls or buying mutual funds that invest in foreign currencies to protect against the decline of the dollar.
Guardian Care Homes accuses the bank of mis-selling it an interest rate hedging product linked to the Libor interest rate which Barclays, and other major international banks based in London, are now known to have manipulated.
Hedge funds may or may not engage in hedging or short- selling.
This hedging comes from Exelon pre-selling megawatt hours when the forward prices in the market were higher, Fremont explains.
In reviewing the price action driven by the Japan catalyst, one has to wonder: How much of the selling was related to expiration-week delta hedging?
With call buying rising in tandem with short-selling, it could be a sign that these bears are hedging their bets against an unexpected rally.
In the trading strategy that has apparently been at the center of the moves over the past week, foreign funds seem to have been hedging their currency risks when making their initial share purchases by selling yen in the foreign-exchange market.
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