hedging

1. The practice by which a business or investor limits risk by taking positions that tend to offset each other. For example, a business stands to lose money if the price of a commodity it holds declines, but it can offset this risk by agreeing to sell a specified amount of the commodity at a set price at some point in the future.

Notes

Hedge funds, which are investment funds usually open only to the very wealthy, grew in the 1990s. The near failure of one such fund in 1998, Long-Term Capital Management, sent shock waves through Wall Street .

Example Sentences

The special counsel is effectively hedging his bets in this all-important wager on the Pence evidence.

From Los Angeles Times

The increase in cargo volume to San Pedro Bay isn’t solely due to shippers hedging against a strike in the East.

From Los Angeles Times

Still, Cohen is hedging his bets talking about getting a new passport and a new name.

From Salon

There are some insurance and hedging programs that can help farmers offset high costs of production or unexpected drops in price.

From Salon

But on the most immediate question in the US he is hedging his bets and refuses to be drawn on whether he thinks Trump or Harris will win.

From BBC

Related Words

• prevarication