What is the opposite of a hedge?
The opposite of a hedge is leverage (aka gearing). A hedge is where you spend money to reduce your exposure. Leverage is where you spend money to increase your exposure. Spread bets are a form of leverage - that's what makes them such an effective way to lose all your money, quickly. The opposite of a hedge is nothing.  Because if you don't want to hedge you bets, you don't, therefore you merely have the original bet. The opposite state of being hedged, is being unhedged. I guess the opposite of being hedged is being unhedged. Typically, a hedge is an additional position that you would take on in order to mitigate the potential for losses on another position. I'll give an example: Say that I purchase 100 shares of stock XYZ at $10 per share because I believe its price will increase in the future.  At that point, my full investment of $1000 is at risk, so the position is not hedged. If the price of XYZ decreases to $8, then I've lost $200.  If the price of XYZ increases to $12, then I've gained $200; the profit/loss curve has a linear relationship to the future stock price. Suppose that I decide to hedge my XYZ position by purchasing a put option. I purchase a single option contract (corresponding to my 100 shares) with a strike price of $10 and an expiration date in January 2013 for a price of $0.50/share. This means that until the contract expires, I can always sell my XYZ shares for a minimum of $10.  Therefore, if the price of XYZ decreases to $8, then I've only lost $50 (the price of the option contract), compared to the $200 that I would have lost if the position was unhedged.  Likewise, however, if the price increases to $12, then I've only gained a net total of $150 due to the money I spent on the hedge. (the details of how much money you would actually lose in the hedged scenario are simplified out above; even out-of-the-money options retain some value before expiration, but pricing of options is outside of the scope of this post) So, as a more pointed answer to your question, I would say that the hedged/unhedged status of a position can be characterized by its potential for loss. If you don't have any other assets that will increase in value to offset losses on your position of interest, I would call it unhedged. "There is no opposite of a hedge, except not having a hedge at all. A ""hedge"" isn't directional. If you are short, you hedge by having something that minimizes your losses if you are wrong. If you are long, you hedge by having something that minimizes your losses if it decreases in value. If you own a house, you hedge by having insurance. There are ""hedged bets"" and ""unhedged bets""" I'd say the opposite of hedging is speculating.  If you are convinced an asset will appreciate in value, or rather the probability of gains is enough to induce you to hold the asset, you are a speculator.  There are lots of ways of speculating, including holding risky assets without hedging that risk and possibly magnifying that risk and return via leverage or the embedded leverage in a derivative contract. Generally speaking, if in expectation you are paying to reduce your risk, you are a hedger.  If you are (in expectation) being paid to bear the risk that otherwise someone else would bear, you are a speculator.  The word speculation has been tainted by politicians and others trying to vilify the practice, but at the end of the day it's what we are all doing when we buy stock or any other risky asset.
Generally, anyone can. Selling them is an interesting point, as the buyer has a counterparty risk that you won't be able to pay at the term of the contract. So, if I was a vendor buying a derivative in my example, I would definitely get that derivative from a bank as opposed to my friend Jim Bob. Especially in cases of bespoke derivatives, it doesn't make sense for anyone except people who have material interest to by it, as the expectation value of the hedge is negative. Essentially, you're more likely to lose money than gain money from a hedge. The exception is when you have information above that of the market, which could allow for a positive return. That is the reason that people advocate for derivatives as mechanisms of price discovery, because large imbalances aren't likely to form when someone could arbitrage or even just take positions when the market goes out of whack. That only really works in publically traded markets, however, bespoke derivatives don't really contribute to better pricing afaik.  Of course, that's the simple explanation to a huge, complex, and varied field. Certainly, speculators exist, particularly in the more commoditized derivatives. Especially in the leadup to the financial crisis, large amounts were spent on exotic derivatives that blew up in people's faces. The easiest thing to say about them is that they are double edged swords. In theory, they're fantastic, as it allows risk to be spread around to people that want it. It should lead to a safer system, as hedged comapnies are less exposed to shocks and are more resilient. But in practice, we've alao seen them used as risk concentrators (AIG). We've seen cases where correlations arise that weren't assumed before, and what used to be manageable positions become lead weights. We've seen the dangers that large systemically important financial institutions have when they are a counterparty to tens of trillions in notional derivatives, as when they fail the risk of failure is over every derivative they are counterparty to, not just the hedged exposure.   Sorry, this is more than you asked for. I tend to get carried away. &gt;Nearly 20 years ago in the book Market Wizards, hedge fund manager Michael Steinhardt said the term hedge funds is a misnomer because most funds don’t hedge, and a new name is almost 2 decades overdue. The more apt titles such as Alt In or absolute return funds haven’t seen any traction, so hedge funds seems here to stay. Besides, consider how misnamed mutual funds are. Vanguard is one of the only mutual fund names that remains a mutual ownership structure, so what’s in a name anyway. I am a big fan of what we call inheritance tax. I think it is by far the fairest way we have of redistributing wealth. I don't believe a kid should be entitled to the parents ability to earn and that they should have to achieve that themselves.  The relationship is clearly complicated between welfare and employment. I believe the US employment issues are far more to do with the overall economy and less to do with benefits. The nations that do have high welfare and good employment, such as the scandie nations, have not been as effected by the global downturn for numerous  other reasons (Norway is essentially one giant oil hedge fund) and so are hard to compare. Any southern European nation can be an example of the opposite. "How do option market makers actually hedge their positions so that they do not have a price risk? You cannot complete hedge away price risk of a sold call simply by buying the underlying and waiting.  As the price of the underlying decreases, the ""Delta"" (price risk) decreases, so as the underlying decreases, you would gradually sell some of the underlying to reduce your price risk from the underlying to match the price risk of the option. The opposite is true as well - as the price of the underlying increases, you'd buy more of the underlying to maintain a ""delta neutral"" position. If you want to employ this strategy, first you need to fully understand what ""delta"" is and how to calculate it.  Then you can use delta hedging to reduce your price risk." "As of right now it looks like you can't issue an ETF at least because the underlying ""commodity"" isn't regulated. (See Winkelvoss ETF). I suspect you would run into this problem with any 1940 act fund (mutual fund), but it's more a situation of ""not approved"" rather than illegal, so an MLP hedge fund structure would probably be fine.  And some googling finds Iterative Instinct Management's Storj SPV." "Talking about counterfactuals is hard. The thing is, while these events are hard to predict far out at a micro-detailed level, climate scientists have predicted that such storms would and will happen with increasing frequently such that I'm not sure it's fair to say ""would have"" except in someone's fantasy world where climate isn't happening. Increasingly, these will define the fabric of our existence. When Miami floods, will we say ""housing prices would have been up but for the flooding""? When crops fail, will we say ""crop yields would have been great but for the droughts/floods/heat wave/insect infestation/death of bumblebees""?  Or will we at some point acknowledge that these are things as real as cybersecurity that we must build into our infrastructure and that must not be apologized for as ""one time expenses"" but must be seen as ""chronic costs"", even ""chronic pressures on cost with escalating frequency and power""?" "A straddle is an options strategy in which one ""buys"" or ""sells"" options of the same maturity (expiry date) that allow the ""buyer"" or ""seller"" to profit based on how much the price of the underlying security moves, regardless of the direction of price movement. IE: A long straddle would be: You buy a call and a put at the same strike price and the same expiration date. Your profit would be if the underlying asset(the stock) moves far enough down or up(higher then the premiums you paid for the put + call options) (In case, one waits till expiry) Profit = Expiry Level - Strike Price - (Premium Paid for Bought Options) Straddle" &gt; Risk tolerance is a psychological trait that is genetically based, but positively influenced by education, income, and wealth…  &gt; There is an old adage: It is not a stock market, but a market of stocks.  Phrase-based search results from Google for [these two quotes appearing together](https://www.google.com/search?q=%22Risk+tolerance+is+a+psychological+trait+that+is+genetically+based,+but+positively+influenced+by+education%22++%22There+is+an+old+adage:+It+is+not+a+stock+market,+but+a+market+of+stocks.%22&amp;num=50&amp;tbas=0&amp;tbs=li:1&amp;filter=0&amp;biw=1568&amp;bih=1031).