Post
Topic
Board Economics
Re: ~On Hedging~
by
DrGregMulhauser
on 27/06/2014, 16:22:27 UTC
Theres no hedge for bitcoins.  Hedging is taking both sides of trade.

For example hold long bitcoin position.  Sell bitcoin call option.

Since theres no options market for bitcoin theres no hedge

Strictly speaking, hedging does not mean "taking both sides", it means taking positions which move in opposite directions -- such as in your example of a long position coupled with a short call against the position.

In addition, the list of types of positions which might move opposite to a long position in BTC is not exhausted by options; futures (e.g., ICBIT) and leveraged CFD-style products (e.g., BTC.sx) can perform a similar function.