Phaceliacapital Posted December 27, 2013 Share Posted December 27, 2013 Hi all, I had a thought question for those managing large PA/funds, or maybe all portfolios where liquidity risk might play a significant role. How actively do you consider and assess the liquidity risk your portfolio is running? And in this thought exercise, do you consider buying put options on an index as a (partial) hedge for liquidity risk? My 2 cents is that liquidity risk is definitely one of the more difficult risks to mitigate, as it is almost impossible to quantify. I think that having some kind of contract (owning put options) that gives the right to sell something (an index) at a certain price helps mitigate the risk, even if you do not fully own the index itself. Happy to hear your thoughts/comments! Link to comment Share on other sites More sharing options...
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