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Finance Dictionary and Glossary of Investment Terms
hedge
Definition 1.
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.
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Definition 2.
Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of protecting a position in a related security.
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Definition 3.
transaction that reduces the risk of an investment.
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