Herd mentality
July 07, 2016
When everyone is crowded in the same bet, it doesn't take much to tip the scales.
Futures and options markets are efficient ways for market participants to protect themselves against adverse market movements (to which they are exposed). For example, oil producers can sell their oil production into the future at a price established today in the futures market, which protects them from future price declines. This is known as hedging. Companies that sell products and services internationally can protect themselves from adverse currency movements by hedging with currency options and futures.
To continue reading click here http://hvst.co/29l76cr
When everyone is crowded in the same bet, it doesn't take much to tip the scales.
Futures and options markets are efficient ways for market participants to protect themselves against adverse market movements (to which they are exposed). For example, oil producers can sell their oil production into the future at a price established today in the futures market, which protects them from future price declines. This is known as hedging. Companies that sell products and services internationally can protect themselves from adverse currency movements by hedging with currency options and futures.
To continue reading click here http://hvst.co/29l76cr
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