Hedging is a set of techniques in financial markets aimed at fixing the desired price for a particular financial instrument either by a specific date or for a certain period. It involves using various financial instruments and their derivatives. Unlike diversification, hedging is applied to a specifically chosen financial instrument rather than the entire portfolio. Futures and options on various financial markets are used as hedging instruments.

In my opinion, hedging is impossible without clear planning and a connection between operations in financial markets and business management in the real economy. Since the real economy allows calculating the cost of various products and, at the same time, shows their current prices, the relationship between the cost price of a product, its selling price, and prices of various derivatives in financial markets will serve as the basis for building trading strategies based on hedging.