Chinese hedge

Chinese hedge

Applies mainly to convertible securities. Trading hedge in which one is short the convertible and long the underlying common, in the hope that the convertible's premium will fall. Antithesis of set-up.

Chinese Hedge

In arbitrage, the practice of taking a short position on a convertible security and taking a long position on the underlying asset of that convertible security. The investor makes a Chinese hedge in hopes that the price of the underlying asset will fall, allowing him/her to profit from the decrease in the price of the convertible security. On the other hand, if the underlying asset rises in price, the investor profits from the increase as well. A Chinese hedge is also called a reverse hedge because it is the opposite of a set-up hedge.
References in periodicals archive ?
TIN: Chinese hedge and fund sales produced a low of $5,262 on Wednesday but then the price recovered back to over $5,300, with a close at $5,310 on Friday for a nett loss of just $5 over the week.
Hedge funds are still very new in China and the HFA is in an excellent position to support both domestic Chinese hedge funds and global funds that have opened representative offices in China, but are still waiting for Qualified Foreign Institutional Investor (QFII) licenses," Steinberg said.
Tin: The weight of Chinese hedge selling of this metal above $5300 per tonne proved too much for tin last week and we saw the forward price move from Tuesday's high of $5360 to a low of $5210 on Thursday before closing at $5255 on Friday for an overall loss of $40 per tonne.
In a landmark partnership deal with Chinese Hedge Fund, Shanghai Fortune Asset Management, the Institute of Trading and Portfolio Management (http://www.
In 2007, the Chinese hedge fund industry had grown 100% in the past few years.
Headed by Yiming Di, principal at China-focused consulting firm Schmittzehe and Partners, the goal of the Shanghai Chapter is to work with the city's alternative investments firms in support of the HFA China Chapter's goals of advocating for and educating the public about the Chinese hedge fund industry.

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