Hedging : Hedging means taking a position that offsets a risk you already have, so a bad outcome hurts less.
What it means
Hedging means taking a position that offsets a risk you already have, so a bad outcome hurts less.
Example
A business that loses money if interest rates rise could buy YES on a 'rate hike' contract. If rates rise, the contract pays out and softens the blow.
Practical tip
A hedge costs money when the feared event doesn't happen. Think of it like insurance, not a way to profit.
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Only trade what you can afford to lose. If trading stops feeling like a considered choice, take a break and seek support.
