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

That will provide a revenue boost to SpaceX’s money-losing AI business, but also sends an interesting signal—that the famously risk-tolerant Musk feels frontier AI is a bet worth hedging on.

From The Wall Street Journal • May 27, 2026

A “gamma squeeze” happens when options dealers hedging their books inadvertently leads to a big jump in a given stock.

From MarketWatch • May 26, 2026

Kalshi will launch event contracts for art auction prices, offering hedging tools for collectors and access for retail investors.

From Barron's • May 26, 2026

A “gamma squeeze” happens when options dealers hedging their books inadvertently leads to a big jump in a given stock.

From MarketWatch • May 26, 2026

After all, Montaigne never gave an example of heavenly inspiration, of divine intervention, without hedging it about with doubts and difficulties.

From "The Invention of Science" by David Wootton

Related Words

• prevarication