Hedging offsets risks of individual investments already owned.
Strategic hedging allows Clients to hold onto their investments while eliminating the risks of future losses from those investments. Just like your home owner's insurance protects your home - now you can protect your investments.
A short or a derivative are the instruments used to hedge an investment. There are a broad variety of choices now available to all investors to hedge investments.
Options and/or futures are the primary choices used to hedge positions. Options and futures can also be used to leverage a position.
Lastly, the reason to hedge is to control volatility - which can threaten a portfolio's positive returns. Volatility is an investment's daily up and down movements - investment losses are what we are hedging against.