Duration: 3 Days
Study Time: 60–90 minutes/day
Mode: Offline (notes, examples, paper exercises)
Level: Beginner → Early Intermediate

DAY 1: HEDGING FOUNDATIONS

What Is Hedging?

• Definition of hedging: reducing risk, not increasing profit

• Difference between:

  • Hedging

  • Speculation

  • Diversification

• Why traders and investors hedge positions

  Why Hedging Is Important

  • Protecting capital during uncertainty

  • Reducing emotional stress

  • Managing downside risk

  • Hedging vs stop-loss (key differences)

    
    

    DAY 2: STOCK HEDGING METHODS (THEORY)

    
    

    Hedging Using Opposite Positions (Concept)

    • Long vs short exposure (conceptual only)

    • Why opposite positions reduce net risk

    • When hedging makes sense vs when it doesn’t

      Sector & Portfolio Hedging

      • Correlated stocks

      • Sector risk (example: tech stocks moving together)

      • Why diversification alone is not always hedging

        
        

        Final Exercise:
        Write a 1-page Hedging Plan including:

        • Goal of hedging

        • Situations where you would hedge

        • Situations where you would not

        • Risk rules