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Hedge
Position to offset risk (e.g., options, futures)
Definition
Hedging involves taking an offsetting position to reduce risk from an existing position. Common hedges include options, futures, and forward contracts. Perfect hedges eliminate risk, while cross-hedges provide partial protection.
Related Topics
#risk management
#derivatives
#offsetting positions
#portfolio protection
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Related Terms
Category: Risk
Risk management involves identifying, assessing, and controlling potential losses in investment portfolios.
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