What is Hedging?
Hedging: Opening a position that offsets an existing trade or investment to reduce the possible loss if the price moves the wrong way.
More terms
- Equity
- Your account balance plus the profit or loss of open positions: what the account would be worth if everything were closed now.
- Financial regulator
- A government body that licenses and supervises brokers and sets investor-protection rules, such as the UK FCA, Cyprus CySEC and Australia's...
- Forex
- The global currency exchange market, where currencies trade in pairs such as EUR/USD, open 24 hours a day, five days a week.
- Islamic account
- A trading account with no overnight swap charges on positions held past the trading day; some brokers charge an administration fee instead.
- KYC
- The check a regulated broker makes of your identity and address before activating your account or withdrawals, under anti-money-laundering r...
- Leverage
- A ratio that lets you open a position larger than your balance, such as 1:30, which controls 30 times the margin set aside, magnifying both...