Series 7: 5.4.2. Hedging Strategies

Taken from our Series 7 Online Guide

5.4.2. Hedging Strategies

Unlike speculative strategies, hedging strategies are made, not to increase income, but to reduce risk. More specifically, a hedge is a transaction made to reduce the risk of an already existing investment position by taking an offsetting position. Of course, a hedge cannot limit the risk of loss without compromising the likelihood of gain.

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