Method of hedging in which only the individual open position (underlying transaction) is hedged by establishing an offsetting position (hedging transaction). – Regulators require that the underlying and hedging transactions be clearly assigned; the risk of loss on the underlying transaction must be matched by any gain on the hedging transaction. – See hedging, hedge accounting, hedging, macro hedges. – Cf. ECB Monthly Bulletin, February 2004, pp.
79.
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