Hedging applies to different types of investment, such as stocks, bonds, futures, etc.
On the other hand, there are single varieties holding multiple orders and empty orders simultaneously, and there are complex hedges among multiple varieties.
Ordinary people use hedging to prevent the uncertainty of market price changes caused by fundamental news.
As well as reducing risk, it also reduces profits.
So hedging doesn’t work for most part-timers.
The standard is to trade the same position to offset the final gain and loss.
But there are no risks and no benefits.
For retail investors, we use hedging trades to arbitrage the market.
Therefore, some traders will set up different hedging positions, and some will choose to eliminate the hedging position after checking the uncertainty in order to gain.
With hedging, if the price moves in the direction of the original prediction, you can close out the hedge position and eventually make a profit on the original position.
If the price moves in the opposite direction, close out the two positions and eventually profit from the change in the price of the previously reserved position.
Foreign exchange hedging includes single hedging and complex hedging.
Because FOREIGN EXCHANGE TRADING CAN directly buy up and buy down, the simplest foreign exchange hedge trading is to point to buy and sell a kind of pair at the same time, the buying and selling position is the same, no matter how the price trend changes, the final price change can cancel each other.
In addition to a simple hedge against the same currency pair, two currency pairs with strong negative correlations can also be used for hedging transactions.
Some traders will use cash to hedge their trades.
The most commonly used option hedging currency pairs are,,,, etc.
Foreign exchange options commonly used in the world include American options and European options.
The difference lies in the timeliness of buying and using options.
American options are valid for one month after purchase.
Another foreign exchange hedging tool is the use of foreign exchange forward contracts rather than contracts.
The difference between a forward contract and a spot exchange is simply a matter of timing.
Foreign exchange forward contracts are widely used by import and export enterprises.
As Europe’s energy crisis intensifies supply constraints, oil prices have enjoyed a third straight pre-Christmas rally and gold has held steady.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
