Buying gold before Dhanteras, full fuel tank before price hike — that’s hedging, says expert

From locking your petrol tank before a price hike to buying gold ahead of Dhanteras, most people hedge without even knowing it. Chartered Accountant Abhishek Walia says hedging isn’t some complex financial concept meant only for traders — it’s a basic survival strategy in uncertain times.

“Hedging simply means protecting yourself from future price swings or financial losses. And the truth is, most of us are already doing it, just not consciously,” said financial expert and CA Abhishek Walia.

Make everyday decisions, for instance:

Buying US dollars before a trip abroad, because the rupee might fall

Locking in a fixed interest rate on your home loan when the RBI is expected to hike rates

Investing in gold when the stock market feels shaky. 

Gold hedging is a risk management strategy used to protect against losses from price fluctuations in gold. It typically involves taking offsetting positions using financial instruments like gold futures or derivatives to lock in current prices. This helps reduce exposure to market volatility. For instance, a gold producer expecting to sell gold later might sell futures contracts now to guard against a possible price drop in the future.

“That’s hedging,” Walia said. “You’re not trying to make more money. You’re just trying to avoid losing what you already have.”

In the world of high finance, companies hedge using complex tools like futures, options, and currency swaps. But for regular individuals, it’s much simpler.

“A term insurance policy is hedging against the loss of income. Health insurance is hedging against medical emergencies. Even buying gold or diversifying into real estate and stocks — all of it is hedging,” he explained.

Hedging, Walia added, is not driven by fear — it’s driven by preparation. “You don’t carry an umbrella because you want it to rain. You carry it in case it rains. That’s what hedging does for your money.”

According to Walia, inflation, global instability, and fluctuating interest rates make hedging more important than ever. “If you're relying on one source of income or one type of investment, you’re exposed. Hedging is how you reduce that risk.”

He also dismissed the notion that hedging is only for finance professionals. “Next time someone says ‘hedging is for experts,’ tell them: ‘Bro, my mom’s been hedging with gold for 25 years,’” he said with a smile.

Walia recommends that young earners start small but stay consistent. “Even putting ₹500 into a SIP or building an emergency fund over time is hedging. You don’t need big money to start—just the right mindset.”

His message is clear: “Hedging is not a get-rich strategy. It’s a stay-safe strategy — and in today’s world, that matters even more.”