๐๐๐๐ฅ๐ก๐๐ก๐ ๐ฆ๐๐ฅ๐๐๐ฆ:
๐ข๐ฃ๐ง๐๐ข๐ก ๐ฆ๐๐๐๐๐ก๐ ๐ฃ๐๐ฅ๐ง ๐ฎ: ๐ข๐ฃ๐ง๐๐ข๐ก ๐๐๐๐๐๐ก๐
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> ๐๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐:
- Hedging is a risk management strategy employed to offset losses in investments by taking an opposite position in a related asset.
- The reduction in risk provided by hedging also typically results in a reduction in potential profits.
- Hedging requires one to pay money for the protection it provides, known as the premium.
**The best way to understand hedging is to think of it as a form of insurance. When people decide to hedge, they are insuring themselves against a negative event's impact on their finances. This doesn't prevent all negative events from happening. However, if a negative event does happen and you're properly hedged, the impact of the event is reduced.**
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As an Option Buyer and Option Seller:
- You can go bullish by hedging with some bearish positions
- You can go bearish by hedging with some bullish positions
Bullish Positions:
- Buying call, Buying Futures, Selling Put
Bearish Positions:
- Buying Put, Selling Futures, Selling Call
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โขโขAlthough it's a vast topic, tried explaining in short. Experienced traders know this thing, shared this as a learning for new traders.โขโข
โขโขVideo edited in 1.15X to manage Frontpage 15min threshold time limit โขโข
Do refer the video for example on Hedging strategy. Do support for motivation purpose ๐
#Happy_Learning