8.3 C
London
Saturday, November 26, 2022
Home Hedge

Hedge

0
8
Last modified: May 5, 2021
Estimated reading time: < 1 min

hedge is an investment or trade designed to reduce your existing exposure to risk.

The process of reducing risk via investments is called “hedging“.

A hedge is a way to reduce the risk of adverse price movements in an asset.

Most hedges take the form of a position that offsets one or more positions you have open, like a futures contract offering to sell stock that you have bought.

Hedging can come in many forms, however, like buying an asset that tends to move inversely with the asset you are holding.

A hedge that removes all risk from a position – except the cost of the hedge itself – is referred to as a perfect hedge, but most traders will only hedge against part of their position.


If this article seems useful for your then please click the like button below. You can also share your valuable feedback or ask questions in the below comment section. Also, subscribe to our newsletter for trading-related updates.
Was this article helpful?
Dislike 0 0 of 0 found this article helpful.

OPEN A DEMO ACCOUNT

Previous articleHandle
Next articleLeverage
FXPedia.info helps individual traders learn how to trade the forex market. We introduce people to the world of currency trading and provide educational content to help them learn how to become profitable traders. We're also a community of traders that support each other on our daily trading journey.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Have questions? Search our knowledgebase.