Hedge fund products terminate as dealers face hedging crisis



A slew of hedge fund-linked products globally, including constant proportion portfolio insurance (CPPI) trades, are either being restructured or terminated by dealers as hedging has become impossible due to many funds having gated (halted redemptions in the fund until a specified date) or changed their liquidity measures.

Dealers typically hedge hedge fund-linked products by buying and selling shares in the underlying fund (the delta), but as hedge funds have gated or changed their liquidity

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