hedge

noun
\ˈhej \

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 against in 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 3 a hedge tavern

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Other Words from hedge

Verb

hedger noun
hedgingly \ ˈhe-​jiŋ-​lē \ 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

Pessimistic Democrats see it as a hedge against a downturn. Michael Dresser, baltimoresun.com, "Save it, spend it or give it back? Future online sales tax windfall stirs debate in Maryland," 22 June 2018 The government will hold $400 million of ZTE’s money in escrow as a hedge against future violations by the company, which last year settled criminal and civil charges in connection with violations of U.S. sanctions on Iran and North Korea. Damian Paletta, BostonGlobe.com, "France’s Macron threatens rare rebuke of US at G7, Trump fires back," 8 June 2018 Such trading had been curtailed by the Volcker Rule, which required banks to show regulators specifically how each trade acts as a hedge against specific risks. Author: Emily Flitter, Alan Rappeport, Anchorage Daily News, "Big banks will get a reprieve from a key crisis-era rule that would let them engage in riskier trading," 30 May 2018 CDSs were intended as a hedge against losses from defaults, not a bet on a firm deciding to trigger them. The Economist, "A bondholder finds a sneaky way to trigger insurance against default," 3 May 2018 Pecan growers and suppliers are hoping to sell United States consumers on the virtues of North America's only native nut as a hedge against a potential trade war with China, the pecan's largest export market. Emily Schmall, The Christian Science Monitor, "To withstand tariffs, farmers rebrand pecans to US consumers," 25 Apr. 2018 Pecan growers and suppliers are hoping to sell U.S. consumers on the virtues of North America's only native nut as a hedge against a potential trade war with China, the pecan's largest export market. Emilie Schmall, USA TODAY, "Snack food alternative? US pecan growers using trade war to expand their consumer market," 25 Apr. 2018 That was done to help offset the huge and growing battlefield advantage Assad had, and as a hedge against Iran and Hezbollah in the area. Neri Zilber, Vox, "Israel and Iran’s escalating shadow war in Syria, explained," 25 Apr. 2018 Ski areas have long offered lower pricing tiers in spring and summer to help with cash flow and as a hedge against a potentially dry upcoming season. Frederick Reimers, Outside Online, "Why You Should Buy a Ski Pass Right Now," 6 Apr. 2018

Recent Examples on the Web: Verb

The National Guard—the King's army—met them along the way, and, hedging their bets, decided to see the ladies to the palace gates. Maya Singer, Vogue, "Who's Up For Burning It All Down?," 6 Oct. 2018 But instead of hedging his reply, Silver’s blunt answer hurt Hansen’s credibility. Geoff Baker, The Seattle Times, "Why the Seattle City Council voted in favor of KeyArena but not Chris Hansen’s Sodo project," 25 Sep. 2018 With no support for the BlackBerry or Nokia phones that were popular at the time, its demise hedged most on its lack of compatibility with non-Windows Mobile devices. Stefan Etienne, The Verge, "The Galaxy Note 9 is one step closer to the smartphone-computer dream," 13 Aug. 2018 Pemex will probably hedge its 2019 crude production at $51 a barrel, Trevino said. Amy Stillman, Bloomberg.com, "Pemex's Trevino Rushes to Put House in Order Before Elections," 16 May 2018 About 50 to 60 percent of their 2018 production has been hedged, the survey indicated. Kevin Crowley, Houston Chronicle, "Is the Eagle Ford about to get a boost?," 10 Apr. 2018 Royal fans have hedged their bets that the couple likely landed on a traditional name like Albert or Arthur—though James, Alexander and Philip are other popular options. Megan Decker, Harper's BAZAAR, "Prince William Gave the Sweetest Update on the Royal Baby and Threw In Some Dad Jokes," 25 Apr. 2018 But with millions of dollars at stake, the agency is hedging its bets. Jon Chesto, BostonGlobe.com, "Wynn Resorts pulled into legal fight over Everett casino site," 10 July 2018 Only one member of Congress endorsed her — and Rep. Ro Khanna (D-Calif.) hedged his bets by also endorsing Crowley. David Weigel, Washington Post, "Alexandria Ocasio-Cortez: The Democrat who challenged her party’s establishment — and won," 27 June 2018

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

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

Verb

see hedge entry 1

Adjective

see hedge entry 1

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Learn More about hedge

Statistics for hedge

Last Updated

30 Oct 2018

Look-up Popularity

Time Traveler for hedge

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

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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

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 \

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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Comments on hedge

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