3 Replies to “What is difference between hedging and forward contract?”

  1. Hedging is a collection of tactics of which a forward contract is one type.

    I can’t help you on the cancellation and extension clauses. Forward contracts are not as standardized as “futures” and generally each contract has its own provisions. I’ve only taken the one course on hedging, and they didn’t cover that level of details.

  2. Hedging is buying stock in cash and selling in future contract and forward contract is taking position in futures only be it selling or buying in any index stock

  3. Hedging is like dodjing the risk.
    Suppose you feel that you have Reliance shares at 1000 and they are going to fall to 990 then you hedge the risk in derivative market.

    Forward contract happens outside SEBI and stock market.

Leave a Reply

Your email address will not be published. Required fields are marked *

18 + 11 =