Hedge

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1. (n) A bush to fling your apple core over when promenading in the countryside.

2. (n; v) Finance: to manage a risk buy trading financial instruments that will tend to have the opposite effect. This can be by selling the exact thing you bought — this is called delta-one hedging, or trading a portfolio of instruments whose performance, when combined, is negatively correlated to the risk you are trying to hedge.

See also