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 t… See more

Hedging techniques generally involve the use of financial instruments known as derivatives. Two of the most common derivatives are options and futures. With derivatives… See more

Every hedging strategy has a cost associated with it. So, before you decide to use hedging, you should ask yourself if the potential benefits justify the expense. Remember… See more

The majority of investors will never trade a derivative contract. In fact, most buy-and-holdinvestors ignore short-term fluctuations altogether. For these investors, there is little point in eng… See more