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What do we know about Nifty and the BSE Sensex in their usefulness on hedging?

April 26, 2017BSE hedging nifty sensex usefulness

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What do we know about Nifty and the BSE Sensex in their usefulness on hedging?

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Nifty has higher hedging effectiveness for typical portfolios of all sizes. Nifty also requires lower initial margin (since it is less volatile) and is likely to enjoy lower basis risk (owing to the ease of arbitrage).