Portfolio Insurance
1. A method of hedging a portfolio of stocks against the market risk by short selling stock index futures.
2. Brokerage insurance such as the Securities Investor Protection Corporation (SIPC). Investopedia Says:
1. This hedging technique is frequently used by institutional investors when the market direction is uncertain or volatile. Short selling index futures can offset any downturns, but it also hinder any gains.
2. SIPC is an insurance that provides brokerage customers up to $500,000 coverage for cash and securities held by a firm. Related Terms:
Constant Proportion Portfolio Insurance - CPPI
Hedge
Index Futures
Securities Investor Protection Corporation - SIPC
Selling Short |