That's exactly what hedging is. You're not trying to maximize profits, but to reduce risk. Sometimes you want to lock in a gain or a price. Suppose you have a stock that has risen a lot, and you'll use the proceeds for a downpayment on a house in March. It's November and you could sell now, but then you'd have to pay the capital gains tax in April. If you sell in January, you can postpone the taxes for a year. You're worried the price might fall in the next 2 months so you hedge.
@@ppietras97 As Ronald mentioned hedging is not about making profits, but covering your risk so that you don't loose money. To loose or make money is speculative trading which is opposite of hedging. In essence speculative trading is all about taking risk, while hedge is to get rid of the risk.
Great video!
Great video !!
Excellent
This video is basically 1 + (-1) = 0, but in more complex terms.. you have no real application
That's exactly what hedging is. You're not trying to maximize profits, but to reduce risk. Sometimes you want to lock in a gain or a price. Suppose you have a stock that has risen a lot, and you'll use the proceeds for a downpayment on a house in March. It's November and you could sell now, but then you'd have to pay the capital gains tax in April. If you sell in January, you can postpone the taxes for a year. You're worried the price might fall in the next 2 months so you hedge.
@@ppietras97 As Ronald mentioned hedging is not about making profits, but covering your risk so that you don't loose money. To loose or make money is speculative trading which is opposite of hedging. In essence speculative trading is all about taking risk, while hedge is to get rid of the risk.
useless. numbers and examples are needed.
fuck up idiot
@@billmason4193 take it easy
@@bufuization funny thing is that you’re right