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Hedging
Published: 04/26/2018

What is hedging in trading and investing?

 

Traders will hedge a bet in order to reduce the risk associated with the initial position they have taken up. This normally means placing a bet in the opposite direction to their original bet, occasionally in the form of a futures contract. A hedge bet won’t necessarily cover the entire cost of a lost bet, however it will cover some of the loss made on a trader’s original position.

 
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