Hedging
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| A strategy designed to reduce investment risk using call options, put options, short-selling, or futures contracts. Its purpose is to reduce the volatility of a portfolio by reducing the risk of loss; it can help lock in profits. |
Related Terms: | ||
Diversification Spreading one's assets across a wide variety of investments within a portfolio to minimize the impact ... Risk Reversal The term risk reversal is used in a couple of different ways in trading:In foreign-exchange trading, ... Hedge A term for reducing the risk of one position by taking other positions with options, futures ... | ||
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