what is hedging and speculation?

This is a discussion on what is hedging and speculation? within the Economic & Fundamental Analysis forums, part of the Methods category; What is the main difference between hedging and speculation ??????????????? please describe it in detail....

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Old Mar 4, 2011, 7:42pm   #1
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what is hedging and speculation?

What is the main difference between hedging and speculation ???????????????please describe it in detail.
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Old Mar 4, 2011, 8:03pm   #2
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Re: what is hedging and speculation?

Speculation is attempting to benefit from a change in price. Buy low, sell high.

Hedging is looking to eliminate or reduce exposure to a particular sort of risk. For example, a multi-national corporation may hedge transactions done in foreign currencies to eliminate the risk of adverse exchange rate moves.
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Old Aug 23, 2012, 10:45am   #3
 
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Re: what is hedging and speculation?

Speculation is the practice of engaging in risky financial transactions in an attempt to profit from short or medium term fluctuations in the market value of a tradable good such as a financial instrument.
Hedging is a risk management strategy used in limiting or offsetting probability of loss from fluctuations in the prices of commodities, currencies, or securities.
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Old Aug 23, 2012, 12:04pm   #4
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Re: what is hedging and speculation?

Go through to this link: What is the difference between hedging and speculation?
Here is described difference between hedging and speculation.
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Old Oct 12, 2012, 10:14am   #5
 
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Re: what is hedging and speculation?

Hedging involves in reducing risk in order to focus on another subject, while speculating involves taking on risk in order to profit from insight.
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Old Oct 29, 2012, 10:29am   #6
 
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Re: what is hedging and speculation?

Hedging offers an element of protection against price risk, whereas speculation involves deliberately taking a risk on price fluctuations, in the hope of obtaining a profit.
The hedger gives up some opportunity in exchange for reduced risk. The speculator on the other hand acquires opportunity in exchange for taking on risk.
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Old Oct 29, 2012, 11:59am   #7
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Re: what is hedging and speculation?

Hedging is the posh term Traders use to disguise the Speculation they are really doing
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Old Oct 30, 2012, 7:35am   #8
 
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Re: what is hedging and speculation?

Another difference:
Both broker an trader are using hedging and speculation. But trader hedge from the risk to blow up, and broker hedge from the risk of profit by the trader.
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