Hedge
To protect against possible loss by taking offsetting actions, especially to reduce financial risk.
verbHedge
To protect against possible loss by taking offsetting actions, especially to reduce financial risk.
verbImagine This
Picture a cautious investor who plants a literal hedge around a portfolio diagram on a desk. As markets swing, the hedge absorbs the impact of losses, keeping the overall position safer.
Sounds Like
/hΙdΚ/ (sounds like 'hedge')
Looks Like
Hedge, a dense row of shrubs used as a boundary; imagine a privacy hedge between two houses shared by neighbors.
Remember This
To hedge your bets means to reduce risk by taking offsetting positions or protections. The term comes from the idea of a garden hedge that fences in and protects whatβs inside.
Other Forms
Connect With
mitigate, protect, guard, offset, diversify, risk management, hedge fund
Note
Hedge implies reducing risk, not guaranteeing profits. In finance, hedging often uses derivatives or opposite positions; a hedge may still involve some risk or cost. The noun form hedge refers to the plant boundary itself.
Study Deeper
- Investors hedged their bets by buying put options to limit potential losses.
- The company hedges currency risk by matching expenditures and revenues in the same currency.
From Old English haga (hedge, fence); related to Dutch haag and German Hecke, originally meaning a fence or boundary and later extending to the financial sense of reducing risk.
HEDGE: Hold Every Dollar, Guard Earnings (visualize a hedge guarding a portfolio against losses).
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Imaginative
adjectiveHaving or showing creativity and originality in thinking; able to imagine new ideas, scenarios, or solutions.
Color
verbTo influence, affect, or alter (often in a subtle or indirect way).
Gregarious
adjectiveSociable; fond of company; often living in groups or preferring the company of others.
Similar Words
Related words and words with the same part of speech.
Mitigate
verbTo make something less severe, harmful, or harsh; to alleviate or reduce the impact of an adverse condition.
Abandon
verbTo give up completely, to desert or leave behind, or to relinquish a claim, plan, or responsibility.
Abate
verbTo decrease in amount or intensity; to reduce or end something.
Abolish
verbTo formally end or repeal a system, practice, or institution; to officially put an end to something established.
Abridge
verbTo shorten (a text, speech, or other work) by omitting parts; to condense.
Abscond
verbTo depart secretly or flee, especially to avoid detection or arrest.