Education Series

Education Series on Derivative Contracts

Speculative Trading:

The main drawback of hedging is that the profit generated from one side is eaten up by the loss on the other and hence, profitability would be the minimum. Therefore hedging is widely used by large fund managers, high networth individual investors etc and the major objective is to eliminate risk rather than making big gains from trading. Those who are interested in making gains can take positions in Futures contracts on the basis of his expectations regarding the way in which the market would move.