Hedge -definition

[munna99185]

Hedge is making an investment to reduce the risk of adverse price movements in an asset. It is used to reduce any substantial losses/gains suffered by an individual or an organization. An example of a hedge would be if you owned a stock, then sold a futures contract stating that you will sell your stock at a set price, therefore avoiding market fluctuations. Investors use this strategy when they are unsure of what the market will do.

Sayed Farrukh Ahmed
Assistant Professor
Faculty of Business & Economics
Daffodil International University

[Nusrat Nargis]

thanks sir.