REGULATORS SHOULD NOT PROHIBIT EXECUTIVES FROM HEDFING THEIR COMPANY\'S STOCK. eXPLAIN THE ARGUEMENT FOR THIS POSITION Solution Heding is a mechanism to lower the risk due to price fluctuation. An example of hedging would be if you own a company\'s stock then sold a futures contract which allow you to sell your stock at set price. In a volatile situation where price fluctuates more frequently hedging by executive diversifies portfolio, limits losses and rases cash. It must be disclosed to provide transparency to other shareholders. It is like a signal to shareholders what top most employees of the company thinks about the growth..