Options and Futures

Hedging

As a financial expert, it is important to understand the concept of hedging. This involves mitigating the risk of price fluctuations in the cash market by taking a counter position in the futures market. This strategy, known as hedging, is commonly used by businesses to safeguard against unfavorable price changes. There are two types of hedging, namely Selling (Short) Hedge and Purchasing (Long) Hedge, which are both utilized by hedgers to protect their assets.

Related terms

Leading Indicators

Understand the meaning and definition of Leading Indicators in the context of stock market, trading, and investments.

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Price Limit

Understand the meaning and definition of Price Limit in the context of stock market, trading, and investments.

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Position Limit

Understand the meaning and definition of Position Limit in the context of stock market, trading, and investments.

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Opening Sale

Understand the meaning and definition of Opening Sale in the context of stock market, trading, and investments.

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Wire House

Understand the meaning and definition of Wire House in the context of stock market, trading, and investments.

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Liquid

Understand the meaning and definition of Liquid in the context of stock market, trading, and investments.

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