Generally, the traders use such derivatives as futures or options for hedging. For example. Your shop accepts bitcoins for payment. The bitcoin rate usually changes. To not to lose your profit in case of bitcoin rate fall. For this you use the hedge.pro platform and implement the hedging of the required currency, the robot does everything for you.
For example, you are a “Gasprom” shareholder and you assume that in the long- term period the shares will rise. But you are afraid of the short-term price decrease and so you insure yourself, i. e. hedge against the decrease. For this you buy an option with the right to sell (put option) the “Gasprom” shares at a set price. If your assumptions are correct and the market prices of the shares will decrease and become lower than the prices set in the option (strike price), you will just sell the share at a strike price.
Another example is connected to rice. Let’s suppose that the company that consumes the agricultural products, for example, barley for the production of beer would like to insure itself from unexpected price growth. Such company may hedge and buy the futures contract that will set the price at which the brewery will buy barley in the future. The price growth won’t affect the insured brewery. But if the price falls, the brewery will have to overpay – this will be a price of risk absence.
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