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

If you are happy with the amount, you are also hedging the risk that he could fail to make future payments.

From MarketWatch • May 16, 2026

Net fuel costs fell on lower average fuel prices and higher fuel hedging gains during the period, while cargo flown revenue declined 2.1%.

From The Wall Street Journal • May 14, 2026

Soria says Goldman team favors “thoughtful short-term hedging solutions” in both momentum and across the AI complex to protect the surge in value.

From MarketWatch • May 8, 2026

The company’s earnings will also be hurt by an accounting quirk that forces the company to take paper losses on the value of hedging contracts before realizing gains from increases in commodity prices.

From Barron's • Apr. 30, 2026

The second subsection reviews three issues: the problem of focusing on a description of professional activity rather than an exposition of subject matter, the overuse of apologetic language, and the disadvantages of excessive hedging.

From "The Sense of Style" by Steven Pinker

Related Words

• prevarication