Economics Options And Futures Questions
The role of options and futures in hedging is to provide a means for individuals and businesses to manage and mitigate their financial risks. By using options and futures contracts, investors can protect themselves against potential losses or fluctuations in the prices of underlying assets, such as commodities, currencies, or stocks. These financial instruments allow hedgers to lock in prices, hedge against adverse price movements, and reduce their exposure to market volatility. Overall, options and futures serve as valuable tools for hedging strategies, enabling individuals and businesses to safeguard their financial positions and manage risk effectively.