A riskless hedge can best be defined as A situation in which aggregate risk can be reduced by derivatives transactions between two parties.

A riskless hedge can best be defined as    A situation in which aggregate risk can be reduced by derivatives transactions between two parties.     A hedge in which an investor buys a stock and simultaneously sells a call option on that stock and ends up with a riskless position.     Standardized contracts that are traded on exchanges and are "marked to market" daily, but where physical delivery of the underlying asset is virtually never taken.     Two parties agree to exchange obligations to make specified payment streams.     Simultaneously buying and selling a call option with the same exercise price.