Rio Hedge: Excerpt from Investopedia.com

TERM OF THE DAY - MAY 05, 2008

Rio Hedge

What Does it Mean? A situation where a trader who is facing financial or legal troubles hedges his or her position in an investment with a ticket to a tropical location. The idea behind the Rio hedge is that if the investment goes bad (either legally or through financial loss) the investor will use the ticket to escape.

Investopedia Says... The Rio hedge is a joke in the investment community regarding the risks involved in trading. A traditional hedge will protect against potential financial risks associated with an investment. The Rio hedge pokes fun at protecting against risks, such as getting caught by the authorities, lenders, or owners of the funds under management. Haha.. was reading through the daily email from investopiedia.com and found this really funny term of the day... And since I'm an options and derivatives person, i thought I'd post it here and have a laugh together! Well, in this current economic situation, I'm sure that many a fund manager would really love to go for a Rio Hedge! hahahaa..... Related Posts: Option to ride Option to ride II Getting hot around the collar To ride a bus