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English definition of “hedge”

hedge

noun [C]
 
 
/hedʒ/ FINANCE, STOCK MARKET
an investment made in order to reduce the risk of losing money on shares, bonds, etc. that you own, for example, by buying futures (= agreements to sell shares for a particular price at a date in the future) or options (= the rights to buy or sell shares for a particular price within a particular time period): These formulas are devised to tell the bank what kind of hedges to purchase to provide the best possible protection of its assets.a hedge against sth In recent years, investors have also bought gold as a hedge against US dollar weakness. inflation hedges → See also currency hedge
(Definition of hedge noun from the Cambridge Business English Dictionary © Cambridge University Press)
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