Why will you hedge?

–Say you own shares of TCS Corporation. Although you believe in this company for the long run, you are a little worried about some short-term loss in the TCS.To protect yourself from a fall in TCS, you can buy a put option (a derivative) on the company, which gives you the right to sell stocks at a specific price (strike price). This strategy is known as a married put. If your stock price tumbles below the strike price, these losses will be offset by gains in the put option.