hedging

Meanings

• Noun

  The practice of entering into a derivative contract, or adjusting the position in an existing one, in order to reduce the risk of adverse price movements in an asset.

  - "Investors often use hedging strategies to protect themselves against potential losses in the stock market."
  - "The farmer hedged against the risk of low crop yields by selling futures contracts."

• Verb

  To protect oneself against risk or uncertainty.

  - "The company hedged its foreign currency risk by entering into a forward contract."
  - "The airline hedged its fuel costs by purchasing oil futures."

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Rhymes

Words rhyming with hedging
hedging , bedding , spreading , blending , mending , ending

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Variants

List of all variants of hedging that leads to same result
hedge , hedged , hedger , hedgers , hedges , hedging , hedgingly , hedge against , hedged against , hedges against , hedging against , hedge in , hedged in , hedges in , hedging in

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Etymology

origin and the way in which meanings have changed throughout history.

Originally from the Old English word 'hiedan' meaning 'to protect' or 'to cover'.

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Trivia

Any details, considerations, events or pieces of information regarding the word

1. Did you know that hedging has been used in agriculture since ancient times? Farmers would sell their crops before they were harvested to lock in prices and protect against potential losses.

2. Hedging is not only used in finance and agriculture. It is also common in other industries, such as energy and commodities.

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Related Concepts

informations on related concepts or terms closely associated with the word. Discuss semantic fields or domains that the word belongs to

1. Risk Management: Hedging is a crucial component of effective risk management strategies.

2. Derivatives: Hedging often involves the use of derivatives, such as futures, options, and swaps.

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Culture

Any cultural, historical, or symbolic significance of the word. Explore how the word has been used in literature, art, music, or other forms of expression.

Hedging is a common practice in finance and agriculture, where producers and investors seek to manage risk and uncertainty. In literature, hedging has been used metaphorically to describe various forms of protection or insurance.

How to Memorize "hedging"

1. visualize
   

   - Imagine a safety net or a shield to protect against potential losses.
   - Visualize an investor entering into a futures contract to hedge against a potential stock market downturn.

2. associate
   

   - Associate the word with the concept of protection or insurance.
   - Think of hedging as a way to reduce risk or uncertainty.

3. mnemonics
   

   - Remember HEDGING as an acronym for: H-elping E-veryone D-iscover G-ains I-nvestments N-ecessitates G-uarantees

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