hedging

Cultural  

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.

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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

Experts say it’s worth noting that cruise lines are often protected from short-term shifts in oil costs due to the fact that they’ve locked in pricing in advance, a process known as hedging.

From MarketWatch

EasyJet has said ticket prices might rise towards the end of summer when its hedging deals expire.

From BBC

AI agents could be deployed to buy protective puts should oil spike, hedging against potential stock losses, and automatically sweep customers’ cash into higher-yielding assets, like bonds.

From The Wall Street Journal

"Pakistan has realized that hedging is the best way to go about in regional diplomacy," said Siddiqi.

From BBC

“A lot of the reason for the volatility is the hedging of this short gamma position, which is very near the money right now,” Roos said.

From MarketWatch

Related Words

• prevarication