Hedging or to Hedge a position refers to a strategy used to reduce or mitigate the risk of adverse price movements in an asset. By hedging / taking a hedge position, traders aim to mitigate their downside risk and protect their investments from potential losses by offsetting potential risks. The main goal of hedging is to manage risk and provide some level of protection against price fluctuations. It does not aim to make a profit directly but rather to limit potential losses.
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In summary, a hedge position is a strategic move designed to protect an investment from adverse price movements and manage overall risk in a trading portfolio.
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All accounts at Seacrest Markets are Hedge accounts by default.
What is Hedging?
hedging, hedging a position, hedging out risk,
Written by Seacrest Markets
Updated over 2 months ago