What is a hedging transaction and what is a forex hedging transaction?

In finance, hedge refers to an investment that deliberately reduces the risk of another investment. Hedging is a way to reduce business risk while still making a profit on your investment. Generally, hedging is to carry out two ** related, opposite directions, equal amounts, and break-even transactions at the same time.

What is a hedging transaction? Huichacha answers for you:The so-called hedging refers to the trader going long on a currency and then shorting that currency, that is, long and short on a currency at the same time.

Under normal circumstances, the size of these two orders must be the same to be considered a real hedging transaction.

To give a simple example, for example, fixed-term, 3 months ago the Australian dollar was very cheap, and the low price was bought at 55 56 cents (. **$5,000 regular interest is now up to 69 cents (ready to collect interest, but there are three months left to mature, what should I do?).

Then you can make a hedge in the foreign exchange market, for example, around 69 cents, and estimate the 50,000 Australian dollar contract. Well, now in the next three months, if ** really falls back to 67-68 cents, then it will actually become a two-sided earning, one side of the foreign exchange market has one or two hundred pips to earn, and the other is the Australian dollar you are holding. For example, if you really need to exchange back the Hong Kong dollar, that is, you will close the position in the foreign exchange market, and then you will make money on both sides.

Hedging transactions are a way to ensure that investments can protect against future risks. There are now a number of forex platforms that offer hedging tools, such as the hedging tool of Markets Trader2, an award-winning platform owned by CCCAPITAL in the UK, which allows traders to hold both long and short positions in the same trading product.

Hello, the so-called hedging is to buy a foreign currency at the same time. In addition, it is necessary to sell another currency, i.e. short selling. Theoretically, buying a currency short and selling a currency should be the same as the silver code to be regarded as a real hedging disk, otherwise the two sides will not be able to do the hedging function if the size is different.

Hedging transaction refers to the simultaneous sale of the same quantity, the same variety, but different terms in the market such as option forwards, so as to achieve the purpose of arbitrage or risk aversion.

"Hedging" is also translated as "hedging", "disk protection", "support", "top risk", "hedging", "hedging", etc. In the early days, hedging refers to "a trading method that offsets the risk in the spot market by doing a contract transaction with the same type and quantity of commodities in the ** market as the spot market, but the trading position is opposite".

In the early days, hedging was used in the agricultural market and the foreign exchange market for real value preservation. Hedgers are generally actual producers and consumers, or those who own the goods in the future, or those who need to buy the goods in the future, or those who have claims to be collected in the future, or those who have debts to be repaid in the future, and so on.

These people are exposed to the risk of losses due to changes in commodities and currencies, hedging is a financial operation to avoid risk, the purpose is to avoid the risk of exposure in the form of ** or options and other forms of avoidance ** to marry), so that there is no risk of exposure in their portfolio.

For example, a French exporter knows that he will receive $1 million for exporting a shipment of cars to the United States in three months, but he does not know what the dollar-to-franc exchange rate will be in three months, and if the dollar falls sharply, he will incur a loss. In order to avoid the risk, you can take the same amount of US dollars (to be paid after three months) in the ** market, that is, lock in the exchange rate, so as to avoid the risk of exchange rate uncertainty. Hedging can be both short and short.

1. Don't be in a hurry to buy **, don't just want to buy the lowest price, this is unrealistic. It is also good to really pull up**You are the high price**, so it is better to buy**miss, not to be at fault, not to buy and sell blindly**, it is best to buy **familiar with the disk**.

2. If you are not familiar with it, you can simulate trading first, be familiar with the nature of stocks, it is best to follow for a day or two, familiar with the operation methods, and you can master the best points.

3. Pay attention to the necessary technical analysis, pay attention to the changes in trading volume and the language of the disk (the situation of the disk buy and sell orders).

4. Try to choose hot spots and appropriate points, so that the stock price can be out of the cost area after the same day.

Three people and: ** is more, the popularity is strong, the stock price rises, and vice versa. At this time, what is needed is personal ability to watch the market, and whether it can find hot spots in time.

This is the key to success or failure. **Operation** to be ruthless, the mentality to be stable, it is best to be correct**after the stock price** out of the cost, but once the judgment is wrong, when it comes to adjustment**, it is necessary to sell the stop loss in time, you can refer to the previous post: win in the stop loss, here will not be repeated.

Fourth, the skills of selling**: **It is impossible to be all the time**, there will be adjustments when it rises to a certain extent, then the **operation will be sold in time, generally speaking, when making money, it is right to sell at any time. Don't want to sell the most, but for the sake of the greatest profit, there are still skills in selling, I will introduce my experience (not necessarily the best):

1. If there has been a certain large increase, and the volume is rapidly rising to the price limit without sealing the limit, you can consider selling, especially if there is a long upper shadow.

If you put a huge amount of stagflation or a long upper shadow line in the minute or daily line, you generally do not continue to increase the volume the next day, and it is easy to form a short-term top, so you can consider selling.

3. You can see the 15 or 30-minute chart of the tick chart, such as 5** cross 10 days ** down, and sell in time when the trend feels weak, this trend is often the beginning of the ** adjustment, which is very valuable for reference.

4. For the wrong purchase, you must stop the loss in time, the higher the better, this is a long-term actual combat practice accumulation process, you have to pay if you see the mistake, there is nothing to wait.

The English name of hedging** is hedge

FUND, which means "risk hedged **", originated in the United States in the early 50s of the 20th century. The purpose of its operation is to use financial derivatives such as **, options and related different ** to buy short sell, risk hedging operation skills, to a certain extent, to avoid and resolve ** investment risks.

For example, in another type of hedging operation, the manager first selects a certain type of bullish industry, buys a few high-quality stocks that are bullish in the industry, and sells a few inferior stocks in the industry at a certain ratio. The result of this combination is that if the industry is expected to perform well, the high-quality stocks will rise more than other inferior stocks in the same industry, and the gains from high-quality stocks will be greater than the losses caused by shorting the inferior stocks; If the expectation is wrong, and the industry does not rise but falls, then the decline of inferior stocks must be greater than that of high-quality stocks, and the profit from short selling must be higher than the loss caused by high-quality stocks. Because of this means of operation, early hedging can be said to be a form of management based on a conservative investment strategy based on hedging and hedging.

After decades of evolution, hedging** has lost its original connotation of risk hedging, hedge

The title of fund is also in vain. Hedging** has become synonymous with a new investment model, that is, based on the latest investment theories and extremely complex financial market operation skills, making full use of the leverage utility of various financial derivatives, taking high risks and pursuing high returns.

Hedge**. hedge

fund。A form of investment. It is exempt

market) products. Hedging is called **, which is actually fundamentally different from the investment concept of reciprocity**safety, income and value-added. This kind of ** uses various trading methods (such as short selling, leverage operation, program trading, swap trading, arbitrage trading, derivatives, etc.) to hedge, transposition, hedge, hedging to earn huge profits.

These concepts have gone beyond the traditional operations of risk prevention and return protection. In addition, the legal threshold for initiating and setting up hedging** is much lower than that of reciprocity**, which further increases the risk. In order to protect investors, the North American ** management agency will include it in the ranks of high-risk investment varieties, and strictly restrict the participation of ordinary investors, such as stipulating that each hedge ** investor should be less than 100 people, and the minimum investment amount is 1 million US dollars.

In the actual trading market, a hedging transaction refers to two market-related, identical, opposite direction, and offsetting transactions at the same time. It is mainly used in the ** trading market, and the main purpose is to avoid the risk of single line trading and maintain the stable return of investors. But comparatively speaking, if the investor makes a mistake in judgment, the loss will also be large, so the investor needs to trade carefully.

Features of hedging.

1. Market relevance: It mainly refers to the positive correlation between the market supply and demand of the two **commodities affected by the lack of eggplant. Generally speaking, once the supply and demand in the market changes, the ** of the two commodities will also be affected, and the ** change will be roughly the same direction;

2. Opposite direction: It mainly means that investors need to be opposite to make two transactions. Only then will you be at risk. No matter how it develops and changes, the total income of investors is always in a state of profit and loss;

3.Equal quantity: It mainly means that when investors make two transactions, the ** amount of purchase needs to be consistent, so that both parties can cancel each other out.

Hedging generally refers to the flexible allocation of funds between multiple stocks to reduce the overall investment risk.

For example, if a certain **future expectation** may decline significantly, then the current **full share of this ** in your hand is used to buy other better prospects**, in order to maximize profits with invested capital.

Hedging is a financial term that refers to an investment that deliberately reduces the risk of another investment. A hedging transaction refers to two investments at the same time that are related to each other, the trend is exactly the opposite, the profit and loss cancel each other out, and the number of contracts is relatively large, so that no matter what direction the price is moving, it will always show a profit and a loss.

For example: **hedging is to sell the stock index while ****, so as to achieve breakeven, if **rises, **make money. If it falls, the stock index can make money on this side.

A hedging transaction is to carry out two **related, opposite directions, equal quantities, and break-even transactions at the same time.

Correlation refers to the identity of the market supply and demand relationship that affects the two commodities, and if the supply and demand relationship changes, it will affect the two commodities at the same time, and the direction of change is generally the same. Opposite direction means that the buying and selling direction of two transactions is opposite, so that no matter what direction the ** changes, there is always a profit and a loss.

For example, if you buy a ** ticket at a price of 10 yuan, this ** ticket may rise to 15 yuan in the future, or it may fall to 7 yuan. Your expectations for income are not too high, and the main thing is that you hope that if you don't lose 30% of your money.

One hedging scheme is: you **** at the same time ** put option, for example, the put option here may be "in a month later at $ 9 **" right:

If the stock price is lower than $9 a month later, you can still use $9 ****, and the issuer of the option must receive it in full; Of course, if the stock price is higher than $9, you will not exercise this right. Because you are given this right to choose, the issuer of the option will charge you a certain fee, which is called the option premium.

Originally, your ** could bring you 50% of the gain or 30% of the loss. When you simultaneously** strike a put option with a price of $9, the profit and loss situation changes: the possible gain becomes ($15 - $10 - option premium) $10, and the possible loss becomes:

$10-$9 (option premium) $10.

The potential gains and losses are smaller. With a put option, you pay a portion of the potential gain in exchange for risk aversion.

Hedge trading hedge. Also made: Arbitrage trading.

Name. Trading measures taken to avoid losses on investments in financial products. The most basic way is to buy spot and sell ** or sell spot to buy**, which is widely used in **, foreign exchange, ** and other fields.

The original intention of hedging or arbitrage trading is to reduce the risk of market fluctuations on investment varieties and lock in existing investment results, but many professional investment managers and companies use it to speculate on profits.

For example, I will have $400 in foreign exchange after three months, but I am not sure whether the dollar will fall after three months, so I sell $400 in three months in the financial market to achieve the purpose of hedging value.