Hedge
TradingTrading StrategiesAdvanced Trading Strategies and InstrumentsAdvanced Strategies and Instruments
Hedge (thing) is an investment that protective elements against a resource's adverse price movement, consequently diminishing the financial backer's risk. As an action word, one hedges against negative results in the market similarly that one "hedges their wagers," and a few spectators draw the relationship of taking out an insurance policy.
Features
- Hedging is a strategy that attempts to limit risks in financial assets.
- Famous hedging strategies include taking offsetting positions in derivatives that relate to an existing position.
- Different types of hedges can be developed through different means like diversification. A model could be investing in both cyclical and counter-cyclical stocks.
