Hedge

Hedge
For the investors and traders, a hedge is explained as thecombination of various positions that assists in eliminating risks which is inherent in a position. In making a hedge, the traders will take an opposing position in the separate market. This could lessen the profits if the dealer had acquired only a solitary position. This serves the purpose as the insurance against the unexpected moves of the market. It is an important part of the international trade. As various currencies are utilized in an international trade, the companies are uncovered tothe potential danger in the currency cost fluctuations. To fight this situation, the companies usevarious strategies like the future, currency options and the forward contracts