Jan 22, 2025 · Convexity hedging is a risk management strategy used by insurers and other financial institutions to mitigate the potential risks that can arise from convexity.

Feb 27, 2013 · Observant readers will have noted that various sell-side researchers and other market commentators have mentioned “convexity hedging” as something that could exacerbate a selloff in …

Jul 15, 2025 · As convexity decreases, the exposure to market interest rates decreases, and the bond portfolio can be considered hedged.

Apr 18, 2025 · In a year marked by macro whiplash, convexity has returned to the spotlight. The 2025 long-end bond selloff — with 30y Treasury yields pushing toward 5% — has triggered not just panic, …

Moving beyond the dynamics of a single option, Figure 3 illustrates the impact of a convexity strategy that purchases a portfolio of index put options designed to deliver convex payofs during equity …

Mar 25, 2025 · The recent decline in U.S. Treasury yields has sparked renewed interest in "convexity" hedging, a strategy employed by mortgage portfolio managers, insurance companies, and …

Convexity hedging is a risk management strategy that addresses the non-linear relationship between price changes in financial instruments and their underlying factors.

• Interest rate risk is often managed effectively and flexibly using duration and convexity-based strategies. • These strategies can be implemented in the cash market, or with derivatives.

Sep 20, 2019 · This blog will examine negative convexity, how portfolio managers can hedge the risk associated with negative convexity, and how interest rate swap and swaption dealers manage the …

Apr 18, 2025 · Explore bond convexity fundamentals, calculations, and strategies to optimize portfolio risk and yield. A complete walkthrough for savvy investors.