{"id":19173,"date":"2026-10-27T03:19:57","date_gmt":"2026-10-27T09:49:57","guid":{"rendered":"https:\/\/shoonya.com\/blog\/?p=19173"},"modified":"2026-10-27T03:19:58","modified_gmt":"2026-10-27T09:49:58","slug":"what-is-portfolio-hedging-strategies-examples-and-risks","status":"publish","type":"post","link":"https:\/\/shoonya.com\/blog\/what-is-portfolio-hedging-strategies-examples-and-risks\/","title":{"rendered":"What is Portfolio Hedging: Strategies, Examples and Risks"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\"><p class=\"ez-toc-title\" style=\"cursor:inherit\"><\/p>\n<\/div><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/shoonya.com\/blog\/what-is-portfolio-hedging-strategies-examples-and-risks\/#What_Is_Hedging\" >What Is Hedging?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/shoonya.com\/blog\/what-is-portfolio-hedging-strategies-examples-and-risks\/#What_Are_the_Different_Portfolio_Hedging_Strategies\" >What Are the Different Portfolio Hedging Strategies?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/shoonya.com\/blog\/what-is-portfolio-hedging-strategies-examples-and-risks\/#How_to_Calculate_Your_Beta_and_Position_Size\" >How to Calculate Your Beta and Position Size<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/shoonya.com\/blog\/what-is-portfolio-hedging-strategies-examples-and-risks\/#Step-by-Step_Checklist_for_Retail_Investors\" >Step-by-Step Checklist for Retail Investors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/shoonya.com\/blog\/what-is-portfolio-hedging-strategies-examples-and-risks\/#What_Are_the_Differences_Between_Hedging_Methods\" >What Are the Differences Between Hedging Methods?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/shoonya.com\/blog\/what-is-portfolio-hedging-strategies-examples-and-risks\/#Final_Thoughts\" >Final Thoughts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/shoonya.com\/blog\/what-is-portfolio-hedging-strategies-examples-and-risks\/#Portfolio_Hedging_FAQs\" >Portfolio Hedging : FAQs<\/a><\/li><\/ul><\/nav><\/div>\n<nav style=\"--separator: &quot;\/&quot;\" class=\"wp-block-breadcrumbs\" aria-label=\"Breadcrumbs\"><ol><li><a href=\"https:\/\/shoonya.com\/blog\/\">Home<\/a><\/li><li><a href=\"https:\/\/shoonya.com\/blog\/econonmic-events\/\">Economic Events<\/a><\/li><li><span aria-current=\"page\">What is 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var(--line);border-radius:14px;overflow:hidden;transition:border-color .2s ease, box-shadow .2s ease;}\n  .faq-item:hover{border-color:var(--copper);box-shadow:0 2px 10px rgba(239,161,69,0.18);}\n  .faq-item[open]{border-color:var(--copper);box-shadow:0 2px 10px rgba(239,161,69,0.18);}\n  .faq-q{list-style:none;cursor:pointer;display:flex;align-items:center;justify-content:space-between;gap:16px;padding:17px 20px;font-weight:700;color:var(--forest);font-size:16px;}\n  .faq-q::-webkit-details-marker{display:none;}\n  .faq-icon{flex:0 0 auto;width:26px;height:26px;border-radius:50%;background:var(--copper);color:#fff;display:flex;align-items:center;justify-content:center;font-size:16px;font-weight:800;line-height:1;transition:transform .2s ease, background .2s ease;}\n  .faq-item[open] .faq-icon{background:var(--forest);transform:rotate(45deg);}\n  .faq-a{margin:0;padding:0 20px 18px;color:#33413B;font-size:15.5px;line-height:1.6;}\n  .pattern-img{margin:18px 0 22px;border-radius:14px;overflow:hidden;border:1px solid var(--line);background:var(--mint-2);}\n  .pattern-img img{width:100%;height:auto;display:block;}\n  .pattern-img figcaption{padding:10px 16px;font-size:13px;color:var(--grey);text-align:center;border-top:1px solid var(--line);}\n  .video-wrap{position:relative;padding-bottom:56.25%;height:0;overflow:hidden;border-radius:14px;margin:6px 0 22px;border:1px solid var(--line);}\n  .video-wrap iframe{position:absolute;top:0;left:0;width:100%;height:100%;border:0;}\n  @media (max-width:640px){ body{font-size:16.5px;} .masthead{padding:32px 24px 28px;} .body{padding:28px 24px 34px;} h2{margin-top:36px;} table{font-size:14px;} }\n  .entry-title,.post-title,.single-post h1,h1.entry-title{color:#000!important;}\n<\/style>\n\n<div class=\"body\">\n  <p>An unexpected RBI policy decision or a sharp global market correction can change stock prices within hours. For investors holding shares over years, these short-term movements can create uncertainty about managing their investments.<\/p>\n  <p>Selling shares is not the only way to respond to such situations. Portfolio hedging is another risk-management approach investors may consider to reduce exposure to unfavourable price movements.<\/p>\n  <p>But how does hedging work in the Indian stock market? Which financial instruments are used, and what costs and risks do they involve?<\/p>\n  <p>Let us understand the methods with examples.<\/p>\n\n  <h2><span class=\"ez-toc-section\" id=\"What_Is_Hedging\"><\/span>What Is Hedging?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>Hedging is a risk management technique that involves taking an additional investment position to offset potential losses in an existing portfolio.<\/p>\n  <p>For instance, you don&#8217;t buy health insurance because you want to get sick. You pay a small, non-refundable premium each year to ensure that if a medical emergency occurs, you do not go bankrupt on hospital fees.<\/p>\n  <p>The same rationale applies when hedging your stock portfolio.<\/p>\n\n  <div class=\"tbl-title\">Concept visualization: hedged vs. unhedged<\/div>\n  <div class=\"tbl-scroll\">\n    <table>\n      <thead>\n        <tr>\n          <th>Portfolio<\/th>\n          <th>Market Crashes<\/th>\n          <th>Portfolio Impact<\/th>\n          <th>Hedge Gain<\/th>\n          <th>Net Impact<\/th>\n        <\/tr>\n      <\/thead>\n      <tbody>\n        <tr><td>Without hedging (unprotected)<\/td><td><span class=\"num\">15%<\/span><\/td><td><span class=\"badge b-negative\">Drops 15%<\/span><\/td><td>None<\/td><td><span class=\"badge b-negative\">-15% (painful capital loss)<\/span><\/td><\/tr>\n        <tr class=\"total\"><td>With hedging (protected)<\/td><td><span class=\"num\">15%<\/span><\/td><td><span class=\"badge b-negative\">Drops 15%<\/span><\/td><td><span class=\"badge b-positive\">+13%<\/span><\/td><td><span class=\"badge b-positive\">Only -2%<\/span><\/td><\/tr>\n      <\/tbody>\n    <\/table>\n  <\/div>\n\n  <div class=\"quote\">\n    <p>A hedge is an investment or position made intentionally to cover prospective losses in another asset. You&#8217;re not attempting to make millions from a hedge; you&#8217;re seeking to limit your potential downside if things go wrong.<\/p>\n  <\/div>\n\n  <h3>Common Misconceptions About Hedging<\/h3>\n  <p>Before we go into the tactics, let&#8217;s dispel two frequent beliefs that catch newcomers off guard:<\/p>\n  <ul class=\"doc\">\n    <li><strong>Myth 1: &#8220;Hedging is for big gains.&#8221;<\/strong> Hedging is an expense, not a revenue stream. Maintaining a hedge, like vehicle insurance, slightly reduces your overall net gains during bull markets in exchange for safety during bear markets.<\/li>\n    <li><strong>Myth 2: &#8220;You should always hedge your portfolio.&#8221;<\/strong> Continuous hedging is a surefire method to reduce your long-term compounding. When markets are steady, comprehensive insurance is not required; hedging is most beneficial when valuations are stretched, or large binary events are imminent.<\/li>\n  <\/ul>\n\n  <h2><span class=\"ez-toc-section\" id=\"What_Are_the_Different_Portfolio_Hedging_Strategies\"><\/span>What Are the Different Portfolio Hedging Strategies?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>Indian market participants use several approaches to manage equity exposure. These include derivatives such as put options and futures, along with diversification across different asset classes.<\/p>\n  <p>Each approach works differently, and none suits every investor or market situation.<\/p>\n\n  <h3>Strategy 1: The Protective Put (The Gold Standard of Portfolio Insurance)<\/h3>\n  <p>The simplest and most popular approach to hedge an equity portfolio in India is to purchase index Put Options (PE), specifically on broad indices such as the Nifty 50 or Bank Nifty.<\/p>\n\n  <div class=\"tbl-title\">How it works<\/div>\n  <p>When you buy a Nifty 50 Put option, you obtain the right to sell the index at a predetermined level (the strike price). If the market falls, your Put option gains value, offsetting the decline in your stock holdings.<\/p>\n\n  <div class=\"tbl-title\">Protecting a \u20b910 Lakh portfolio<\/div>\n  <p>Imagine you hold a diversified long-term portfolio of Indian blue-chip stocks worth \u20b910,00,000.<\/p>\n  <ul class=\"doc\">\n    <li><strong>The Setup:<\/strong> Nifty 50 is currently trading at 24,000.<\/li>\n    <li><strong>The Concern:<\/strong> An upcoming global event or rate decision could trigger a 10% market correction over the next month.<\/li>\n    <li><strong>The Hedge:<\/strong> You decide to buy a Nifty 23,500 Put Option expiring in one month.<\/li>\n  <\/ul>\n\n  <div class=\"tbl-title\">Calculation: the math breakdown<\/div>\n  <ul class=\"doc\">\n    <li><strong>Option Premium:<\/strong> \u20b9150 per point.<\/li>\n    <li><strong>Lot Size:<\/strong> 25 units.<\/li>\n    <li><strong>Cost per Lot:<\/strong> \u20b9150 \u00d7 25 = \u20b93,750.<\/li>\n    <li><strong>Number of Lots Needed:<\/strong> To cover a \u20b910 Lakh portfolio (where 1 Nifty contract is worth 24,000 \u00d7 25 = \u20b96,00,000), you buy 2 lots of Puts for maximum coverage.<\/li>\n    <li><strong>Total Hedge Cost:<\/strong> \u20b93,750 \u00d7 2 = \u20b97,500 (roughly 0.75% of your portfolio value).<\/li>\n  <\/ul>\n\n  <div class=\"cols\">\n    <div class=\"card\">\n      <h3>Scenario A: Market Crashes 10%<\/h3>\n      <p>Nifty drops to 21,600<\/p>\n      <ul class=\"doc\">\n        <li><strong>1. Portfolio Loss:<\/strong> Your \u20b910 Lakh stock portfolio drops by roughly 10% = -\u20b91,00,000 loss.<\/li>\n        <li><strong>2. Put Option Gain:<\/strong> Your 23,500 Put option is now deep in-the-money. Its price jumps from \u20b9150 to around \u20b91,900.<\/li>\n        <li><strong>3. Option Profit:<\/strong> (\u20b91,900 &#8211; \u20b9150) \u00d7 50 units = +\u20b987,500 profit.<\/li>\n        <li><strong>4. Net Impact:<\/strong> -\u20b91,00,000 + \u20b987,500 = -\u20b912,500 net loss (only a 1.25% drop instead of 10%).<\/li>\n      <\/ul>\n    <\/div>\n    <div class=\"card\">\n      <h3>Scenario B: Market Rallies 5%<\/h3>\n      <p>Nifty rises to 25,200<\/p>\n      <ul class=\"doc\">\n        <li><strong>1. Portfolio Gain:<\/strong> Your stock portfolio grows by 5% = +\u20b950,000 gain.<\/li>\n        <li><strong>2. Put Option:<\/strong> The Put option expires worthless = -\u20b97,500 loss.<\/li>\n        <li><strong>3. Net Impact:<\/strong> +\u20b950,000 &#8211; \u20b97,500 = +\u20b942,500 net gain.<\/li>\n      <\/ul>\n    <\/div>\n  <\/div>\n  <div class=\"quote\">\n    <p>Notice how in Scenario A, a devastating \u20b91 Lakh drop was converted into a minor scratch. In Scenario B, you still participated in the upside, minus the small cost of insurance.<\/p>\n  <\/div>\n\n  <h3>Strategy 2: Shorting Futures (For Short-Term Event Risk)<\/h3>\n  <p>If you are an active investor with individual stocks trading in the F&amp;O segment (such as Reliance, HDFC Bank, TCS, or Tata Motors), you can hedge specific stock risk by shorting futures contracts.<\/p>\n  <p>Unlike buying Puts (where your cost is fixed to the premium), shorting Futures results in a straight 1-to-1 lock-in.<\/p>\n\n  <div class=\"tbl-title\">Futures hedging mechanism<\/div>\n  <div class=\"tbl-scroll\">\n    <table>\n      <thead>\n        <tr>\n          <th>Position<\/th>\n          <th>If Stock Drops \u20b9100<\/th>\n        <\/tr>\n      <\/thead>\n      <tbody>\n        <tr><td>Long shares in Demat (1,000 shares @ \u20b91,000)<\/td><td><span class=\"badge b-negative\">Portfolio loss: -\u20b91,00,000<\/span><\/td><\/tr>\n        <tr><td>Short stock futures (1 lot @ \u20b91,000)<\/td><td><span class=\"badge b-positive\">Futures gain: +\u20b91,00,000<\/span><\/td><\/tr>\n        <tr class=\"total\"><td>Net result<\/td><td><span class=\"num\">\u20b90 loss (fully locked)<\/span><\/td><\/tr>\n      <\/tbody>\n    <\/table>\n  <\/div>\n  <p>If the share price declines, losses in the cash holdings may be offset by gains on the short futures contract.<\/p>\n  <p>However, if the price rises, gains in the shares may be offset by losses on the futures position.<\/p>\n  <p>This means a closely matched futures hedge can restrict potential upside as well as downside.<\/p>\n\n  <div class=\"tbl-title\">Important considerations<\/div>\n  <p>Futures trading carries obligations that make it more complex than the simplified example suggests.<\/p>\n  <ul class=\"doc\">\n    <li>Margin must be maintained according to applicable requirements.<\/li>\n    <li>Adverse price movements can result in mark-to-market losses and additional margin demands.<\/li>\n    <li>Futures prices may differ from spot prices.<\/li>\n    <li>Contract quantities may not match the investor&#8217;s shareholding.<\/li>\n    <li>Stock derivatives can involve physical settlement obligations if positions remain open until expiry.<\/li>\n    <li>The NSE specifies different contract characteristics, lot sizes and expiry requirements for individual securities.<\/li>\n  <\/ul>\n\n  <h3>Strategy 3: Sectoral &amp; Asset Class Hedging (Macro Protection)<\/h3>\n  <p>You don&#8217;t necessarily need sophisticated derivative contracts to protect your equity investments. Many astute investors leverage inherent market linkages across asset types.<\/p>\n\n  <div class=\"tbl-title\">1. The gold allocation (the ultimate systemic hedge)<\/div>\n  <p>During severe crises in India, gold and equities often have a poor or inverse correlation. When global equities fall due to conflict, inflation, or recessions, capital flows to safe-haven assets such as gold.<\/p>\n  <p>Allocating 10% to 15% of your whole portfolio to Sovereign Gold Bonds (SGBs), Gold ETFs, or Gold Funds provides a permanent, stress-free buffer against currency depreciation and stock market crashes.<\/p>\n\n  <div class=\"tbl-title\">2. USD-INR currency hedges<\/div>\n  <p>India is an import-dependent economy (particularly for crude oil). When global oil prices rise or geopolitical turmoil strikes, the Indian rupee (INR) weakens against the US dollar.<\/p>\n  <p>Holding assets that profit from a rising dollar, such as IT export stocks, pharmaceutical stocks, or US-focused international funds, serves as an automatic internal hedge against broad local market corrections.<\/p>\n\n  <h2><span class=\"ez-toc-section\" id=\"How_to_Calculate_Your_Beta_and_Position_Size\"><\/span>How to Calculate Your Beta and Position Size<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>Not all stocks move at the same speed as the broad market. To hedge effectively, you need to understand your portfolio&#8217;s Beta (\u03b2).<\/p>\n  <ul class=\"doc\">\n    <li><strong>Beta = 1.0:<\/strong> Your portfolio moves in exact tandem with the Nifty 50.<\/li>\n    <li><strong>Beta = 1.5 (High Beta):<\/strong> If Nifty moves up or down by 1%, your portfolio moves by 1.5% (e.g., small-caps, mid-caps, realty stocks).<\/li>\n    <li><strong>Beta = 0.7 (Low Beta \/ Defensive):<\/strong> If Nifty drops 1%, your portfolio drops only 0.7% (e.g., FMCG, IT, Utilities).<\/li>\n  <\/ul>\n  <p>If you manage a high-beta mid-cap portfolio worth \u20b910 Lakhs, buying 1 lot of Nifty Put options won&#8217;t be enough because mid-caps crash much faster than Nifty during panic selling. You would need to weight your hedge accordingly (e.g., buying 1.5x the coverage or using specific mid-cap index hedges).<\/p>\n\n  <h2><span class=\"ez-toc-section\" id=\"Step-by-Step_Checklist_for_Retail_Investors\"><\/span>Step-by-Step Checklist for Retail Investors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>If you want to start hedging your investments, follow this simple framework:<\/p>\n  <ol class=\"steps\">\n    <li><strong>Identify the Trigger:<\/strong> Don&#8217;t buy hedges out of boredom. Ask yourself: Why am I hedging right now? (Is it an upcoming election, quarterly earnings season, or stretched valuations?)<\/li>\n    <li><strong>Choose Your Tool:<\/strong> Choose the right tool for the job:\n      <ul class=\"doc\">\n        <li><strong>For broad market corrections:<\/strong> Buy Nifty \/ Bank Nifty Out-of-the-Money Puts.<\/li>\n        <li><strong>For individual stock risk:<\/strong> Short Stock Futures or buy Stock Puts.<\/li>\n        <li><strong>For long-term structural risk:<\/strong> Allocate to Gold and USD-hedged assets.<\/li>\n      <\/ul>\n    <\/li>\n    <li><strong>Budget Your Expense:<\/strong> Treat the option premium as a lost expense. Never spend more than 0.5% to 1.5% of your total portfolio value on hedging premiums for a single event.<\/li>\n    <li><strong>Define Your Exit Rule:<\/strong> When the market event passes or the volatility subsides, close your hedge. Hedges left open for too long will slowly bleed money due to time decay (Theta).<\/li>\n  <\/ol>\n\n  <h2><span class=\"ez-toc-section\" id=\"What_Are_the_Differences_Between_Hedging_Methods\"><\/span>What Are the Differences Between Hedging Methods?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>Different hedging approaches have different cost structures, protection characteristics and operating requirements.<\/p>\n  <div class=\"tbl-scroll\">\n    <table>\n      <thead>\n        <tr>\n          <th>Method<\/th>\n          <th>How It Works<\/th>\n          <th>Main Limitation<\/th>\n        <\/tr>\n      <\/thead>\n      <tbody>\n        <tr><td>Protective put<\/td><td>A purchased put can gain value when the underlying falls<\/td><td>Premium cost and expiry<\/td><\/tr>\n        <tr><td>Short futures<\/td><td>Opposite futures exposure offsets cash-market movements<\/td><td>Margin obligations and reduced upside<\/td><\/tr>\n        <tr><td>Gold diversification<\/td><td>Adds exposure to a different asset class<\/td><td>Gold may decline alongside equities<\/td><\/tr>\n        <tr><td>International diversification<\/td><td>Spreads investment exposure across markets and currencies<\/td><td>Foreign-market and currency risks<\/td><\/tr>\n      <\/tbody>\n    <\/table>\n  <\/div>\n  <p>A derivative hedge may be designed to address a specific price movement over a defined period. Diversification, by contrast, changes the overall composition of the investment portfolio.<\/p>\n\n  <h2><span class=\"ez-toc-section\" id=\"Final_Thoughts\"><\/span>Final Thoughts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <div class=\"outlook\">\n    <p>Portfolio hedging is one way to manage exposure to unfavourable market movements. Its usefulness depends on the asset being hedged, the instrument selected and the costs involved.<\/p>\n    <p>For long-term investors, diversification and asset allocation remain important considerations, while derivatives require a more detailed understanding of financial risks and contractual obligations.<\/p>\n  <\/div>\n\n  <h2><span class=\"ez-toc-section\" id=\"Portfolio_Hedging_FAQs\"><\/span>Portfolio Hedging : FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <div class=\"faq\">\n    <details class=\"faq-item\" open=\"\">\n      <summary class=\"faq-q\">1. What is portfolio hedging in the stock market?<span class=\"faq-icon\">+<\/span><\/summary>\n      <p class=\"faq-a\">Portfolio hedging is a method of managing investment risk by using an additional position that may offset adverse movements in existing holdings. It can reduce certain losses but does not eliminate market risk.<\/p>\n    <\/details>\n    <details class=\"faq-item\">\n      <summary class=\"faq-q\">2. Can investors hedge their stock portfolio using Nifty options?<span class=\"faq-icon\">+<\/span><\/summary>\n      <p class=\"faq-a\">Nifty put options may be used to manage broad-market exposure. The effectiveness depends on how closely the portfolio tracks the index, as well as the strike price, expiry and contract size.<\/p>\n    <\/details>\n    <details class=\"faq-item\">\n      <summary class=\"faq-q\">3. Is hedging possible without futures and options?<span class=\"faq-icon\">+<\/span><\/summary>\n      <p class=\"faq-a\">Yes, diversification across equities, debt, gold and other asset classes can help manage concentration risk. However, diversification does not guarantee protection during a market-wide decline.<\/p>\n    <\/details>\n    <details class=\"faq-item\">\n      <summary class=\"faq-q\">4. Does hedging guarantee protection against losses?<span class=\"faq-icon\">+<\/span><\/summary>\n      <p class=\"faq-a\">No, a hedge may only partially offset losses, and some hedging methods can introduce additional financial risks. Outcomes also depend on costs and market conditions.<\/p>\n    <\/details>\n    <details class=\"faq-item\">\n      <summary class=\"faq-q\">5. Is portfolio hedging suitable for beginners?<span class=\"faq-icon\">+<\/span><\/summary>\n      <p class=\"faq-a\">Derivative-based hedging requires an understanding of options, futures, contract specifications and potential losses. Beginners may find it more appropriate to first understand asset allocation and general investment risk management.<\/p>\n    <\/details>\n  <\/div>\n\n  <div class=\"disclaimer\">\n    <strong>Disclaimer:<\/strong> This content is for education and awareness purpose only and should not be considered investment advice or a recommendation. Investments in securities markets are subject to market risks. Read all the related documents carefully before investing.\n  <\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>An unexpected RBI policy decision or a sharp global market correction can change stock prices within hours. For investors holding shares over years, these short-term movements can create uncertainty about managing their investments. Selling shares is not the only way to respond to such situations. Portfolio hedging is another risk-management approach investors may consider to &hellip; <a href=\"https:\/\/shoonya.com\/blog\/what-is-portfolio-hedging-strategies-examples-and-risks\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;What is Portfolio Hedging: Strategies, Examples and Risks&#8221;<\/span><\/a><\/p>\n","protected":false},"author":17,"featured_media":19175,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10353],"tags":[10844,10843],"class_list":["post-19173","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-econonmic-events","tag-hedging-in-the-stock-market","tag-hedging-your-stock-market-portfolio"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Hedging in the Stock Market: Methods and Examples<\/title>\n<meta name=\"description\" content=\"Hedging in the stock market means reducing investment risk through options, futures or asset diversification. 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