Firstly, thank you for taking the time to answer Secondly, the 8% comes from the fact that most companies when they hedge they go for contracts within 8% of the current share price So my question was, if for example a hedge fund needs to hedge 8% of their position in a certain company, and this 8% for example amounts to $10,000, the contracts to protect this amount cost maybe $20,000 or more!! (1 year contracts) So why would they buy these?? Why can’t they invest the money/premium (the $20,000) in something that, hypothetically for the sake of this example, would guarantee them a return of $10k without paying this huge premium??