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

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Hedging. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
May 27, 2023 https://payrollheaven.com/define/hedging/.
Chicago Manual of Style (CMS):
Hedging. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/hedging/ (accessed: May 27, 2023).
American Psychological Association (APA):
Hedging. PayrollHeaven.com. Retrieved May 27, 2023
, 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 | 0 Views.