Texas Hedge

A hedged position that increases rather than reduces risk. A Texas hedge is made without regard, or with incorrect regard, for the mathematical formulas necessary to lessen exposure. A Texas hedge may involve applying models incorrectly and finding the wrong efficient portfolio frontier and therefore investing in the "wrong" securities.

References in periodicals archive ?

l Overview on the Texas hedge fund industry: inflows, structure, upcoming managers

Hedge Fund Manager Kyle Bass Says "Greatest Trade Ever" Will be Japan, Coming Debt Crisis Will Result in Huge Shifts of Wealth in U.S., Europe

Todd Stein and Steven McIntyre of the Texas Hedge Report point out that Beijing is seeking to welcome other resource-rich nations into its "historical glow." "Keep your eyes open for stepped up greenback dumping by China in exchange for natural resources such as oil-bearing properties or perhaps more mines," they advise.

Chinese moves in North America

"We're all concerned about what we used to call 'the Texas Hedge,'" says Whitney.