Hedging is an investment strategy used to reduce the risk of adverse price movements in an asset. Typically, it involves taking an offsetting position in a related asset or a derivative product like options or futures. While hedging can reduce potential losses, it can also cap potential gains. It is commonly used in commodity markets but can be applied to other investment areas to manage risk effectively.
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Jenna Lofton, MBA is a stock trading and investment expert with over a decade of experience in the financial industry. She began her career as a financial advisor on Wall Street and now helps everyday investors make smarter financial decisions through StockHitter.com.
Her insights simplify complex financial topics into actionable strategies for beginners and seasoned traders alike.