Difference Between Speculaion And Hedging English

Difference Between Speculation And Hedging

The main difference between speculation and hedging is that speculation involves taking big risks and hoping for high returns by guessing where the market will go. In contrast, hedging is about protecting yourself from losing money if prices move the wrong way.

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Hedging Meaning In Stock Market

Hedging in the stock market means making certain investments to protect yourself from losing money on other investments. People use special financial tools like options and futures to guard against the ups and downs of the market.

Hedging strategies are used to reduce the likelihood of losing money when the market declines. By investing in things that usually move in the opposite direction of their main investments, pe