AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Managing Hedge Duration Risk in Bond Investments
To manage hedge duration risk, PIMCO believes in selling volatility, which has consistent alpha over time. Buffett also follows a similar strategy. One way to hedge duration risk is by selling a put and call on a 10-year treasury contract for 30 days. This helps bring premiums down to the bottom line as long as the market remains stable.