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.

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

Investors haven’t lost their appetite for risk in that new world—the AI-crazed stock market is at records—but instead are hedging their bets with investments not denominated in weakening dollars.

Read more on Wall Street Journal

When it comes to hedging bets, OpenAI just placed a big one of its own.

Read more on Wall Street Journal

The same is true of purchases in China, the world’s biggest market, where consumers are hedging a property market collapse with gold bullion.

Read more on Barron's

Studios that once ran on instinct and big personalities now operate more like data-driven conglomerates, reshuffling execs and hedging bets in a fractured, streaming-dominated market.

Read more on Los Angeles Times

It is a conservative estimate, too, because it does not include various fees to banks, financial advisers and other financing costs, including currency hedging.

Read more on BBC

Related Words

• prevarication