hedge

Definition

An investment made in order to reduce the risk of adverse price movements in a security, by taking an offsetting position in a related security, such as an option or a short sale.

Use hedge in a sentence

We decided to hedge our bets by taking a position that would offset some of the risk of our transactions.

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I could not find my way through the hedge maze because it was very big and there were too many twists and turns.

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My brother is a strong believer that he should own gold as a hedge against the economy collapsing or against the stock market falling because it will always have value.

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