What is hedging and arbitrage?

By IndianMoney , 11 months ago
Hedging is a risk management technique to protect investors from market volatility. This is fluctuation in prices of shares, commodities or currencies. You take a position in the futures market opposite to the physical market to reduce risk. Arbitrage is profiting from price differential by buying an asset in a market where it is priced lower and selling in a market where its higher. Keep in mind the cost of investing.