Hedging

Business, Legal & Accounting Glossary

Definition: Hedging


Quick Summary of Hedging


The act of one who hedges (in various senses).



Full Definition of Hedging


Hedging is a risk management strategy used to limit or offset the probability of a loss from fluctuations in the prices of commodities, currencies, or securities.

In essence, hedging is a transfer of risk without buying insurance policies.

Hedging employs various techniques but, basically, involves taking equal and opposite positions in two different markets (such as cash or futures markets). Hedging is also used to protect one’s capital against the effects of inflation from investing in high-yield financial instruments (bonds, shares, notes), precious metals, or real estate.

 


Synonyms For Hedging


hedge, cover, coverage, covering, blanketing

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Hedging. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. July 05, 2020 https://payrollheaven.com/define/hedging/.
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Hedging. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/hedging/ (accessed: July 05, 2020).
American Psychological Association (APA):
Hedging. PayrollHeaven.com. Retrieved July 05, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/hedging/

Definition Sources


Definitions for Hedging are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 6th January, 2020 | 6 Views.