Hedge

An investment strategy or position taken to reduce the potential risk of unfavorable price movements in an asset. A hedge aims to offset potential losses in one investment by taking an opposing position in another asset or security. This can be done to protect against market volatility, currency fluctuations, or other risks. While hedges may reduce the potential for losses, they can also limit potential gains if the anticipated price movements do not occur as expected. Hedges are commonly used by investors and businesses to manage and mitigate risk in their portfolios or operations.