Investment Hedging Strategies

SCM has advised on over $1 billion of equity hedges over the past year. The purpose of the hedges was to preserve capital in the event of a market downturn. The strategy uses a combination of different option structures ranging from vanilla put spread options to more exotic knockout and look back structures. The strategy is designed as a macro portfolio hedging strategy based on various global equity indices with rolling maturities and ongoing re-hedging, and is not meant to enhance yields. SCM has been involved in all aspects of the equity hedging strategy including creating a hedging policy, negotiating ISDA documents that govern the trades, evaluating optimal structures and solutions, and bidding and executing the hedges.