perfect hedge investment & finance definition
A
hedging strategy in which the profit and loss are equal. In a perfect hedge,
for example, loss in a cash Treasury bond exactly equals the gain on the
futures contract.
See perfect hedge in Wall Street Words
A hedge that exactly offsets any gains or losses from an existing investment position. An example of a perfect hedge is the short sale of an owned security in order to lock in an existing profit and transfer it to a subsequent tax year. Because very few hedges are perfect, most of them operate merely to offset a portion of losses or gains. See also
risk hedge.
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