Hedging is a risk management strategy used by traders to protect their portfolios or individual trades from potential losses due to adverse market movements. By taking offsetting positions in related assets, traders can reduce the impact of price fluctuations and limit their risk exposure.
What is Hedging?
Hedging involves opening a position or series of positions designed to offset potential losses in another asset. While it doesn’t eliminate risk completely, it minimizes the downside. A typical hedge works by taking an opposing position in a related asset, so that gains in one position offset losses in the other.
Common Hedging Strategies

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