What is Hedging?

Hedging is an investment strategy to reduce the risk of value change in a security by taking an offsetting position in a related security. Common hedges include trading “options” and “short selling.”


See Also:

Top 8 Mistakes Investors Make

The Skinny on Employee Stock Options

Ask An Advisor: Is it Better to be Paid in Shares or Cash?

What Does it Mean to “Short” a Stock?

Ask An Advisor: How risky is it to short a stock?

Join the Discussion