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trading in F and all that is futures and options so what are what are the various types of trading in futures and options we have three types hedging arbitraging and speculation so what do you mean by hedging hedging is done only for safety purposes suppose you have a portfolio of say five stocks and you are expecting the market to go down in the near future then you want to you would want to protect your portfolio so you want to hold it but still you dont want to see a value loss in your portfolio so you will be doing hedging now how to do hedging you can go short on derivatives so hedging is all about safety the purpose of hedging is not profits the purpose of hedging is safety the next one is arbitration arbitraging is done for safe profits or risk-free profits so you dont want to take much risk but you want profits also so that kind of trading is called as arbitraging you buy a product buy a share from oneexchange and sell it in another exchange you buy a derivative product in on