DailyStocks.com

Sign up   Log In
Lost Password?
MyDailyStocks
Set Home Page
What's New
Site Map
Help
FAQ
  
GLOSSARY STOCK ANALYSIS INSIDER BUYS PRODUCT REVIEWS EDUCATION SEARCH
Symbol:
Bookmark and Share

MARKET WATCH
DayTrading Portal
Free Stock Charts
Free Technical Analysis
REVIEWS
Online Brokers Review 2014
Investors Daily
Top 20 Baby Boomer WebSites
SEARCH ENGINES
Online Courses
Financial Advisers
SEC filings
Finance Jobs
Brand Reviews Only
Start-up Content Only
GLOSSARY: Enter search term:
Browse dictionary by letter: A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Glossary Term: HEDGE

Definition(s) for HEDGE:


1. ) refers to a security transaction that reduces the risk on an already existing investment position. An example is the purchase of a put option in order to offset at least partially the potential losses from owned stock. Although hedges reduce potential losses, they also tend to reduce potential profits. May also mean to reduce risk or behavior that reduces risk from future price movements

2. ) A measure used to offset losses or potential losses For example, gold and oil often are used as investments to hedge, or offset, inflation

3. ) A conservative strategy used to limit investment loss by effecting a transaction which offsets an existing position.

4. ) A hedge is typically accomplished by making approximately offsetting transactions that will largely eliminate one or more types of risk. Hedging Investors can use derivatives and covered warrants to hedge investments. For instance, if an investor owns a particular stock, he or she can neutralize the impact of an impending fall in price by buying a put option, selling futures or buying a put warrant.


See Also:
CROSS HEDGE, EFFECTIVE HEDGE, HEDGE ACCOUNTING, HEDGE EFFECTIVENESS, HEDGE RATIO, INEFFECTIVE HEDGE, COVERED OR HEDGE OPTION STRATEGIES, CURRENCY HEDGE, DELTA HEDGE, HEDGE CLAUSE, HEDGE QUALITY, INFLATION HEDGE, NEUTRAL HEDGE, PERFECT HEDGE, SHORT HEDGE


Content Library
News
Insider Buys and Activist Buys
RESEARCH
Stock Search Engine
Guide to Financial Sites
FAQ
Investors Research Portal
Glossary
Company Overviews
Forums
Work with DailyStocks
License our Glossary
Write for us
About us
Feedback
Partners & Sponsors
InvestingChannel
COPYRIGHT© 1997-2012 DailyStocks. All Rights Reserved. Privacy Policy.
Link to this page http://www.dailystocks.com/glossary_words/HEDGE.htm, notify us and we will consider your web site to our directory