hedge

noun
\ ˈhej How to pronounce hedge (audio) \

Definition of hedge

 (Entry 1 of 3)

1a : a fence or boundary formed by a dense row of shrubs or low trees
b : barrier, limit pikemen … present a hedge of metal points from which any cavalry would flinch— Tom Wintringham regarded it as the main function of their existence to raise a hedge around the law— F. W. Farrar
2 : a means of protection or defense (as against financial loss) realization that common stocks are the best hedge against inflation— C. E. Merrill
3 : a calculatedly noncommittal or evasive statement bureaucratic literature … festooned with hedges and qualifications— Fortune

hedge

verb
hedged; hedging

Definition of hedge (Entry 2 of 3)

transitive verb

1 : to enclose or protect with or as if with a dense row of shrubs or low trees : to enclose or protect with or as if with a hedge (see hedge entry 1 sense 1a) : encircle homes hedged with boxwoods
2 : to confine so as to prevent freedom of movement or action : to obstruct with or as if with a barrier : hinder hedged about by special regulations and statutes— Sandi Rosenbloom
3 : to protect oneself from losing or failing by a counterbalancing action hedge a bet

intransitive verb

1 : to plant, form, or trim a hedge
2 : to evade the risk of commitment especially by leaving open a way of retreat : trim hedged on the issue
3 : to protect oneself financially usually used with againstin order to hedge against inflation— George Katona : such as
a : to buy or sell commodity futures (see future entry 2 sense 3) as a protection against loss due to price fluctuation
b : to minimize the risk of a bet

hedge

adjective

Definition of hedge (Entry 3 of 3)

1 : of, relating to, or designed for a hedge (see hedge entry 1) a hedge plant hedge selling on the commodity exchanges
2 : born, living, or made alongside or as if alongside a dense row of shrubs or low trees : born, living, or made near or as if near hedges (see hedge entry 1 sense 1a) : roadside the services of a hedge parson a hedge wedding
3 : inferior sense 1 a hedge tavern

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Other Words from hedge

Verb

hedger noun
hedgingly \ ˈhe-​jiŋ-​lē How to pronounce hedgingly (audio) \ adverb

Examples of hedge in a Sentence

Noun the messenger was confronted with a hedge of spears held aloft by the castle guards Verb The garden is hedged by flowering shrubs. She hedged when she was asked to support the campaign. He hedged his earlier comments about the need for new management.
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Recent Examples on the Web: Noun According to a 2010 New York Magazine profile of David Tepper, the Panthers owner and multibillionaire hedge-fund manager has an interesting adornment on his office desk: a set of brass testicles. Carlos Monarrez, Detroit Free Press, "Here are the Detroit Lions' best- and worst-case 2020 NFL draft scenarios," 20 Jan. 2020 After all, Panthers owner David Tepper is a billionaire who made his fortune as a risk-taking hedge-fund manager. Carlos Monarrez, Detroit Free Press, "If Detroit Lions trade No. 3 pick, here's what they could get in Tua Tagovailoa sweepstakes," 9 Jan. 2020 In the book, the hotel’s boiler explodes, killing Jack and burning down the Overlook; in the film, Jack freezes to death in the hotel’s hedge maze. Washington Post, "‘Doctor Sleep’ tries to reconcile the visions of Stephen King and Stanley Kubrick. But is that possible?," 8 Nov. 2019 About the only people able to afford a Knicks ticket these days are preening hedge-fund bros who think a back-door play is something to hide from the Securities and Exchange Commission. Dan Barry, New York Times, "The Lost Decade of New York Sports," 30 Dec. 2019 Betting that a currency peg would break became a signature hedge-fund trade. The Economist, "Buttonwood Do not write off the macro hedge-fund manager just yet," 28 Nov. 2019 In other cases, Nubank hedges by offering a line of credit as low as $10 to start, increasing the amount over time as customers build up a history of good payments. Julianne Pepitone, CNN, "One of Latin America's most valuable startups is changing the way Brazilians bank," 6 Dec. 2019 One of the delights of the autumn garden is to sit beside a sheltering hedge of the evergreen osmanthus, a holly look-alike that late in the year produces tiny white blossoms that fill the still air with a knockout perfume. Washington Post, "Gardens have largely lost their fragrance. Here’s how we can bring it back.," 4 Dec. 2019 Popular items included tall ladders, framing nailers, leaf blowers, bush/hedge trimmers and edgers. John Benson, cleveland, "Lakewood Alive’s innovative tool-lending library enjoys successful inaugural year," 27 Nov. 2019 Recent Examples on the Web: Verb Billionaire Alibaba co-founder Jack Ma's dream of listing closer to home -- a move that would have curried favor with Beijing and hedged against trade war risks -- risks back-firing without an offering. Lulu Yilun Chen, chicagotribune.com, "Alibaba targets November window for $10 billion listing," 12 Nov. 2019 Companies including Taittinger of France have invested in land in Britain to hedge against the effect of temperature spikes in Champagne. Liz Alderman, New York Times, "Scandinavian Wine? A Warming Climate Tempts Entrepreneurs," 9 Nov. 2019 On Friday, however, Reich began to hedge against the optimism a little bit. Jim Ayello, Indianapolis Star, "Colts not willing to risk further injury, sit Jacoby Brissett for Brian Hoyer vs. Dolphins," 9 Nov. 2019 While McIngvale is finding new places to bet his millions — hedging against a big mattress promotion at his stores — sports betting markets are quickly expanding across the nation. San Diego Union-Tribune, "Column: Mattress Mack bets big as sports betting spreads," 7 Oct. 2019 Experts believe many Chinese businessmen are using countries like Cambodia to park their wealth, hiding profits from Communist Party authorities and hedging against an economic slowdown at home. Shashank Bengalistaff Writer, Los Angeles Times, "Chinese money transformed a sleepy beach town in Cambodia. Then came disaster," 4 Aug. 2019 So to hedge against such a collapse, the government should do two things. Noah Smith, The Denver Post, "Guest Commentary: The middle class risks consuming itself," 30 Dec. 2019 The ruling was a blow to what had widely been seen as an attempt by Manhattan's district attorney, a Democrat, to hedge against the possibility that Trump would pardon Manafort for federal crimes. Arkansas Online, "Manafort's NY fraud case tossed over double jeopardy concern," 18 Dec. 2019 Hedge funds really do hedge their bets to make money. Washington Post, "How the Hedge Funds Are Really Playing Brexit," 1 Oct. 2019 Recent Examples on the Web: Adjective Hedge fund managers will still get pinched, Mnuchin said. Tory Newmyer, Washington Post, "The Finance 202: Here's how Louise Linton could change the tax debate," 23 Aug. 2017 Press Secretary Sean Spicer abruptly resigned Friday morning after President Trump made clear his intent to hire former hedge fund executive Anthony Scaramucci as his next communications director. Zeke J Miller, Time, "A President Trump Staff Shake-Up," 21 July 2017 Hedge fund industry executive Anthony Scaramucci, an advisor to U.S. President Donald Trump, has been named chief strategy officer of the U.S. Export-Import Bank, a source familiar with the appointment said on Tuesday. Reuters, Fortune, "Trump Ally Scaramucci Might Be Landing Post at Export-Import Bank," 28 June 2017 Once only a curiosity with strong appeal to libertarians and technologists, bitcoin's supporters now include hedge fund managers, titans of industry and a former Treasury secretary. Tribune News Service, OregonLive.com, "Bitcoin moves beyond mere curiosity as value skyrockets," 7 June 2017 Other island residents include: pharmaceutical billionaire Phillip Frost and his wife, Patricia; hedge fund operator Wayne Holden; and Latin music power couple Gloria and Emilio Estefan. Jennifer Boehm, Sun-Sentinel.com, "Star Island mansion formerly owned by Lennar co-founder listed for $49M," 1 June 2017 She and hedge fund manager James Matthews married at a church in rural England. Kevin Scotta And Gregory Katz, chicagotribune.com, "An almost royal wedding: Pippa Middleton ties the knot in England," 20 May 2017 Hedge funds holding sales-tax bonds called Cofinas also sued to prevent Puerto Rico... Andrew Scurria, WSJ, "Puerto Rico Creditors Sue Over Debt-Cutting Plans," 2 May 2017 A federal tax break that benefits hedge fund executives and other wealthy Wall Street investment managers will be targeted by President Trump's tax overhaul, a top White House official said Sunday. Kevin Mccoy, USA TODAY, "Aide says Trump tax plan will target Wall Street carried interest deduction," 30 Apr. 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'hedge.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of hedge

Noun

before the 12th century, in the meaning defined at sense 1a

Verb

14th century, in the meaning defined at transitive sense 1

Adjective

14th century, in the meaning defined at sense 1

History and Etymology for hedge

Noun, Verb, and Adjective

Middle English hegge, from Old English hecg; akin to Old English haga hedge, hawthorn

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Time Traveler for hedge

Time Traveler

The first known use of hedge was before the 12th century

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Statistics for hedge

Last Updated

6 Feb 2020

Cite this Entry

“Hedge.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/hedge. Accessed 19 Feb. 2020.

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More Definitions for hedge

hedge

noun

Financial Definition of hedge

What It Is

In finance, a hedge is a strategy intended to protect an investment or portfolio against loss. It usually involves buying securities that move in the opposite direction than the asset being protected.

How It Works

Let's assume part of your investment portfolio includes 100 shares of Company XYZ, which manufactures autos. Because the auto industry is cyclical (meaning Company XYZ usually sells more cars and is more profitable during economic booms and sells fewer cars and is less profitable during economic slumps), Company XYZ shares will probably be worth less if the economy starts to deteriorate. How do you protect your investment?

One way is to buy defensive stocks. These stocks might be from the food, utility, or other industries that sell productsThe definition of hedge on InvestingAnswers that consumers consider basic necessities. During economic slumps, these stocks tend to gain or at least hold their value. Thus, these stocks may gain when your XYZ shares lose.

Another way to hedge is to purchase a put option contract on the shares (this would essentially allow you to "lock in" a particular sale price on XYZ, so even if the stock crashed, you wouldn't suffer much). You could also sell a futures contract, promising to sell your stock at a set price at a certain point in the future.

Why It Matters

Hedging is like buying insurance. It is protection against unforeseen events, but investors usually hope they never have to use it. Consider why almost everyone buys homeowner's insurance. Because the odds of having one’s house destroyed are relatively small, this may seem like a foolish investment. But our homes are very valuable to us and we would be devastated by their loss. Using options to hedge your portfolio essentially does the same thing. Should a stock or portfolio take an unforeseen turn, holding an option opposite of your position will help to limit your losses.

Portfolio hedging is an important technique to learn. Although the calculations can be complex, most investors find that even a reasonable approximation will deliver a satisfactory hedge. Hedging is especially helpful when an investor has experienced an extended period of gains and feels this increase might not be sustainable in the future. Like all investment strategies, hedging requires a little planning before executing a trade. However, the security that this strategy provides could make it well worth the time and effort.

Source: Investing Answers

hedge

noun
How to pronounce hedge (audio)

English Language Learners Definition of hedge

 (Entry 1 of 2)

: a row of shrubs or small trees that are planted close to each other in order to form a boundary
: something that provides protection or defense

hedge

verb

English Language Learners Definition of hedge (Entry 2 of 2)

: to surround (an area) with a hedge
: to avoid giving a promise or direct answer

hedge

noun
\ ˈhej How to pronounce hedge (audio) \

Kids Definition of hedge

 (Entry 1 of 2)

: a fence or boundary made up of a thick growth of shrubs or low trees

hedge

verb
hedged; hedging

Kids Definition of hedge (Entry 2 of 2)

1 : to surround or protect with a thick growth of shrubs or low trees The yard is hedged by shrubs.
2 : to avoid giving a direct or exact answer or promise The more questions I asked, the more he hedged.

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\ ˈhej \
hedged; hedging

Legal Definition of hedge

: to reduce possible losses in speculative transactions by engaging in offsetting transactions (as futures trading)

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More from Merriam-Webster on hedge

Thesaurus: All synonyms and antonyms for hedge

Rhyming Dictionary: Words that rhyme with hedge

Spanish Central: Translation of hedge

Nglish: Translation of hedge for Spanish Speakers

Britannica English: Translation of hedge for Arabic Speakers

Britannica.com: Encyclopedia article about hedge

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