Hedge always restricted as a cost paid when things go horribly wrong. While it is not entirely wrong but there is more to it. Let us start with busting a myth of Hedge and then carry on understanding how hedging with Options can help get more out of the same trades.

Litteral meaning of Hedge is a fence around the property to restrict unwanted from entering and protect valuable from leaving the property. That is exactly how it is.

I have often seen misconception that “I lost some money; can you hedge and recover the loss?” This is a myth. Hedging in anyway can not undo an already incurred loss. There are many other uses of it that are far more valuable though. We will look at 3 of such uses and how can that be incorporated in our day-to-day trading and investments.

1. Restricting Ri

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