Hedge

Hedge
Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract.

An example of a hedge would be if you owned a stock, then sold a futures contract stating that you will sell your stock at a set price, therefore avoiding market fluctuations.

Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge).


Investment dictionary. . 2012.

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  • Hedge — Hedge, n. [OE. hegge, AS. hecg; akin to haga an inclosure, E. haw, AS. hege hedge, E. haybote, D. hegge, OHG. hegga, G. hecke. [root]12. See {Haw} a hedge.] A thicket of bushes, usually thorn bushes; especially, such a thicket planted as a fence… …   The Collaborative International Dictionary of English

  • Hedge — Hedge, v. t. [imp. & p. p. {Hedged}; p. pr. & vb. n. {Hedging}.] 1. To inclose or separate with a hedge; to fence with a thickly set line or thicket of shrubs or small trees; as, to hedge a field or garden. [1913 Webster] 2. To obstruct, as a… …   The Collaborative International Dictionary of English

  • Hedge — Hedge, v. i. 1. To shelter one s self from danger, risk, duty, responsibility, etc., as if by hiding in or behind a hedge; to skulk; to slink; to shirk obligations. [1913 Webster] I myself sometimes, leaving the fear of God on the left hand and… …   The Collaborative International Dictionary of English

  • Hedge — may refer to:*Hedge (barrier) or hedgerow, line of closely spaced shrubs planted to act as a barrier *Hedge (finance), investment made to limit loss *Hedge (linguistics), intentionally non committal or ambiguous sentence fragmentsee also*Hedgerow …   Wikipedia

  • Hedge — bezeichnet: das Hedgegeschäft im Finanzbereich eine adverbiale oder adjektivische Wendung, genannt Heckenausdruck Ian Charleson Hedge (* 1928), schottischer Botaniker Thomas Hedge (1844–1920), US amerikanischer Politiker Siehe auch:… …   Deutsch Wikipedia

  • hedge — / hej/ vi hedged, hedg·ing: to reduce possible losses in speculative transactions by engaging in offsetting transactions (as futures trading) Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. hedge …   Law dictionary

  • hedge — [hej] n. [ME hegge < OE hecg, akin to Ger hecke < IE base * kagh , wickerwork, wickerwork pen > ON heggr, L caulae, sheepfold: basic sense “woven fence, enclosure”] 1. a row of closely planted shrubs, bushes, or trees forming a boundary… …   English World dictionary

  • hedge — ► NOUN 1) a fence or boundary formed by closely growing bushes or shrubs. 2) a contract entered into or asset held as a protection against possible financial loss. 3) a word or phrase used to allow for additional possibilities or to avoid over… …   English terms dictionary

  • hedge — [n] boundary, obstacle, especially one made of plants barrier, bush, enclosure, fence, guard, hedgerow, hurdle, protection, quickset, screen, shrubbery, thicket, windbreak; concepts 429,470 hedge [v1] avoid, dodge beat around the bush*, be… …   New thesaurus

  • Hedge — (spr. Hedsch), Frederick Henry, geb. 1805 zu Cambridge im Staate Massachusetts, ging 1818 mit George Bancroft nach Deutschland u. besuchte seit 1821 Schulpforte, kehrte 1823 nach Amerika zurück, studirte auf der Harvard Universität in Cambridge,… …   Pierer's Universal-Lexikon

  • hedge in — index circumscribe (surround by boundary), envelop, occlude, restrict Burton s Legal Thesaurus. William C. Burton. 2006 …   Law dictionary

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