"This is like the perfect hedge: Let's spin it off and raise money.

In fact, none of these approaches are likely to provide anything close to a perfect hedge, eliminating all risk of loss.

And apartment REIT's aren't a perfect hedge against the value of your single-family home.

Used properly in conjunction with purchases and sales of stocks, their salesmen said, futures and options could prevent portfolio losses, making them the perfect hedge.

David J. Askin, an analyst of mortgage markets, thought he had devised the perfect hedge: a way to make money no matter what direction the markets moved.

To talk with some, the financial insurance products available today offer such a perfect hedge that no player need ever lose money - a suspect claim in a trading world that is meant to have risks.

"It is a perfect hedge, as opposed to shorting the market, because if the market keeps going higher far longer than anyone thought it would, such as what happened in 1999, you could face devastating losses."

"Like the surfer who is always searching for the perfect wave, there's a continuing quest for the perfect hedge," said John J. Phelan Jr., chairman of the New York Stock Exchange.

A1 CAUGHT SHORT IN SELLOFF David J. Askin thought he had devised the perfect hedge.

The report concluded that Fannie Mae rode roughshod over the rules, certifying that some hedges were "perfect hedges" when they were not, and in other cases treated as hedges investments that did not qualify for the treatment.