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What is mean by hedging in forex trading. Plz explain?

forex trading

Q: What is mean by hedging in forex trading. Plz explain?

What is mean by hedging in forex trading. Plz explain. thanks

www.goldsenze.com Answer:

Hedging means:

Corporations in which individual investors place their money have exposure to fluctuations in all kinds of financial prices, as a natural by-product of their operations. Financial prices include foreign exchange rates, interest rates, commodity prices and equity prices. The effect of changes in these prices on reported earnings can be overwhelming. Often, you will hear companies say in their financial statements that their income was reduced by falling commodity prices or that they enjoyed a windfall gain in profit attributable to the decline of the Canadian dollar.

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