Hedge (define)

http://www.investopedia.com/terms/h/hedge.asp

Hedge

DEFINITION OF ‘HEDGE’

Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract.

INVESTOPEDIA EXPLAINS ‘HEDGE’

An example of a hedge would be if you owned a stock, then sold a futures contract stating that you will sell your stock at a set price, therefore avoiding market fluctuations.

Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge).

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About Philippe Splingart

ArtMaker Creator of the "Spynacker Green Fund" concept, (The "Green Fund Spynacker" Arbitrage Hedge Fund Method with very low leverage ) The reflexion point is to create an alternative in a changing world. Maintain the achievements and wealth of knowledge, Empower creation to develop an alternative management and to activate and enhance the development elements.
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