Hedging in Online Trading
How to use Online Hedging
Hedging has come to us from Forex market online trading. It is a complex way of correlating upward and downward trends. With its help you can secure your profit at a minimal stake without risking much. The whole idea of Hedging in Online Trading lies in a simple truth: sometimes you can place an Up and Down trade at virtually the same time and receive a high return as the profit percentile offered by broker can be much higher than the average and reach over 100%. Meaning that you will still receive several percents of profit disregarding the outcome of a trade.
Another way for Hedging in Online Trading is to place an opposite trade with a lesser investment that in case of reverse of the trend can guarantee you a return of your initial trade. Though if the initial trade succeeds, the profit is halved with the use of online hedging.
To my mind, Hedging in Online Trading can be employed in very rare instances as the majority of well-to-do brokers offer various kinds of insurance and the need for hedging is eliminated. I find this tool to be archaic and it can be left behind for those who still deal with the Forex market.