Hedging Example

Example 1: - Dow Jones March:

Enter the amout that you want to trade and whether you want to BUY or SELL.

Quote	Stake	Buy or Sell	Trade
10765-10775		BuySell

Which means :

The first price
10765 = bid price = price at which you can SELL (going short) the instrument. If you believe the price will go down you should SELL.

The second price
10775 = offer price = price at which you can BUY (going long) . If you believe the price will go up you should BUY.

Each quote applies for a specific market or instrument – Dow Jones, and for a specified time or date in the future – March.

Spread
The difference between bid and offer prices is commonly called the spread.

 

 

05 JAN

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