| Hedge | |
 Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract. |
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 An example of a hedge would be if you owned a stock, then sold a futures contract stating that you will sell your stock at a set price, therefore avoiding market fluctuations. Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge). |
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 A Beginner's Guide To Hedging - Learn how investors use strategies to reduce the impact of negative events on investments. Introduction To Hedge Funds - Part One - Learn everything you need to know about the characteristics and strategies of hedge funds. Introduction To Hedge Funds - Part Two - Discover the advantages and pitfalls of hedge funds and the questions to ask when choosing one. Finding Profit in Pairs - Read about a market neutral trading strategy that can achieve profits through relatively low-risk positions. |
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