A strategy used to offset market risk, whereby one position protects another
Hedging
An investment strategy by which the investor tries to eliminate all potential future gain or loss on an investment. For example, investors may hedge their investments with stock options, future contracts, or by selling short.
Hedging
The purchase or sale of a derivative security (such as options or futures) in order to reduce or neutralize all or some portion of the risk of holding another security.
Hedging
The purchase or sale of a related security in order to reduce the risk of holding a security.
