Hedging describes an investment meant to reduce risk of price movements in a related asset. Investors will hedge their positions by purchasing assets or futures contracts that will offset their losses if their investment positions fail to pan out as expected. For example, an equities investor may buy gold to hedge against a possible stock market crash.
Investors should consider the investment objectives and unique risk profile of cryptocurrencies carefully before investing. Cryoptocurrencies are subject to risks similar to those of other investment portfolios.
Investors should be aware that system response, execution price, speed, liquidity, market data, and account access times are affected by many factors, including market volatility, size and type of order, market conditions, system performance, and other factors.
All investments involve risk and the past performance of a cryptocurrency, security, or financial product does not guarantee future results or returns. There is always the potential risk of losing money when you invest in cryptocurrencies, securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing.
Cryptocurrency is a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value, but it does not have legal tender status. Cryptocurrencies are sometimes exchanged for fiat currencies, but they are not currently backed nor supported by any government or central bank.
Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies. Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, cryptocurrency markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing. Cryptocurrency trading requires knowledge of cryptocurrency markets. In attempting to profit through cryptocurrency trading, you must compete with traders worldwide. You should have appropriate knowledge and experience before engaging in substantial cryptocurrency trading. Cryptocurrency trading may not generally be appropriate, particularly with funds drawn from retirement savings, student loans, mortgages, emergency funds, or funds set aside for other purposes. Cryptocurrency trading can lead to large and immediate financial losses. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a particular cryptocurrency suddenly drops, or if trading is halted due to recent news events, unusual trading activity, or changes in the underlying cryptocurrency system.