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         The research paper aims to discover various derivative instruments and its strategies which can be used by investors to hedge their risk of losses. Hedging is a risk management strategy used in limiting or offsetting probability of loss from fluctuations in the prices of commodities, currencies, or securities. As a result of geopolitical risks and uncertainties in global economic growth, prices fluctuations range on markets significantly expands. To protect against the risk of violent prices fluctuations, the practice of hedging using derivatives becomes more and more popular. Companies also uses derivative contracts to hedge their risk of interest rate fluctuations, currency rate fluctuations, foreign exchange risk. Farmers, manufacturers also can hedge their risk of price fluctuations by using derivative instruments like futures contract. Trader should have correct market anticipation for return enhancement. The study reveals the effectiveness of risk reduction using hedging strategies. It has found that risk cannot be avoided but can only be measured. As it is a task based report mixed research methodology is been used. Cases have been explained with interpretations and solution to hedge the risk. Theoretical information has been taken from books, journal, published papers, newspapers etc.

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