Verðhedging
Verðhedging is a financial strategy used to mitigate the risk of adverse price movements in an asset. The primary goal of hedging is to reduce the uncertainty associated with future price fluctuations. This is typically achieved by taking an offsetting position in a related asset or derivative. For example, a farmer expecting to harvest a crop in the future might hedge against a potential drop in crop prices by selling futures contracts for that crop. If the price of the crop falls, the loss on the physical crop is offset by the gain on the futures contract.
Hedging is not about making a profit; it is about protecting against potential losses. It involves a