India, March 12 -- It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong - American hedge fund tycoon George Soros.

On the D-Street, however, nothing is certain - making a fortune or wasting it. One day, you may find yourself riding the bull with an average Joe (stock), and the next, a sudden downturn, driven by multiple macroeconomic factors, could wipe out all the gains and bite into your initial investments.

Now, while it's impossible to predict a market downturn, losses can be minimised by taking an opposite position in a related asset. This risk management strategy is called hedging. Simply put, this investment strategy involves trading in deri...