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

Some institutions have already boosted exposure to defensive assets, volatility hedging and cash buffers, expecting broader sentiment swings.

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Behind the scenes, though, Ellison was hedging his bets.

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Foreigners are hedging holdings against the dollar, pushing it lower.

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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.

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

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Related Words

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