A Guide to Hedge Using Futures Contract
Futures trading is itself a hedging exercise that existed since time immemorial. When terms like stock market or similar were in oblivion, buyers used to lock-in the price of an asset by making an advance payment to sellers. Likewise, sellers with speculation of sluggishness in the future market, tend to make a contract before the produce or asset was ready to be sold. So, in a way both the buyers and sellers want some sort of protection or hedge against an anticipated economic fluctuation. Traditional commodity, stock or crypto – no matter what trading option you bet on, hedging is an important tool against any unexpected fluctuation due to any reason – known or unknown. If you are an investor in the crypto futures market, here are some proven hedging tools that provide not just extra indemnity to your investment, but also help you maximize your profit. These tools are an icing on the cake. Before we talk about the new tools of hedging, it would be imperative to learn the basic con