Using a hedge is somewhat analogous to taking out an insurance policy. If you own a home in a flood-prone area, you will want to protect that asset from the risk of flooding—to hedge it, in ot… See more

Derivatives are financial contracts whose price depends on the value of some underlying security. Future… See more

Using derivatives to hedge an investment enables precise calculations of risk, but it requires a measure of sophistication and often quite a bit of capital. However, derivatives are not the only way to hedge. Strategically diversifying a … See more

Hedging is a technique used to reduce risk, but it’s important to keep in mind that nearly every hedging practice will have its own downsides. First, as indicated above, hedging is imperfect and i… See more

Hedging is an important financial concept that allows investors and traders to minimize various risk exposures that they face. A hedge is effectively … See more

A common way of hedging in the investment world is through put options.Puts give the holde… See more

In the index space, moderate price declines are quite common and highly unpredictable. Investors focusing on this area may be more concerned with moderate declines than with more severe ones. In these cases, a be… See more

For most investors, hedging will never come into play in their financial activities. Many investors are unlikel… See more