noun

hedging

HEJ-ing

Hedging (noun) means the practice of making an additional investment or trade designed to offset losses on another position, so that a fall in one is cushioned by a gain in the other. Example: “The airline uses hedging to protect itself against a spike in fuel prices.”

noun

finance The practice of making an additional investment or trade designed to offset losses on another position, so that a fall in one is cushioned by a gain in the other.

"The airline uses hedging to protect itself against a spike in fuel prices."

"Currency hedging cost them margin but saved the quarter."

linguistics The use of cautious language that softens a claim and avoids full commitment, such as may, tends to or arguably.

"Academic writing relies on hedging: results suggest rather than results prove."

Hedges collectively, or the work of planting and trimming them.

"Traditional hedging keeps the field boundaries stock-proof."

How to Use Hedging

Learner’s notes

In plain EnglishProtecting yourself in case things go the other way.

When to use it

The finance sense dominates in news; the language sense appears in academic guidance.

Memory tip

A hedge fund does not necessarily hedge; the name is historical.

Trace the full origin ↓

Easily confused with

hedge fund → speculation → arbitrage

Common pairings

currency hedging hedging strategy hedging your bets hedging language

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Fill the Gap

Can you complete this real example?

The airline uses _____ to protect itself against a spike in fuel prices.

Etymology

From hedge, Old English hecg 'a boundary of bushes'; the financial and evasive senses come from the idea of putting a protective fence around oneself.

Origin: Old English

Synonyms

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risk management offsetting insurance qualification equivocation softening

Related Words

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Rhymes for hedging

edging pledging dredging acknowledging

See all rhymes for hedging →

Frequently Asked Questions

What is the difference between hedging and speculation?

Hedging is designed to reduce exposure to a risk you already carry. Speculation takes on new risk in the hope of profit. The same instrument, such as an option, can be used for either; the difference is the intention behind it.

What does it mean to hedge your bets?

To spread your commitment across more than one option so that you are protected whichever way things turn out. Outside finance it often carries a mild criticism of indecisiveness.

Is hedging in writing a bad thing?

Not in academic or scientific writing, where it is expected: it signals honestly how strong the evidence is. In persuasive writing it weakens the argument, because piling up words like somewhat and possibly makes the writer sound unsure.

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