Copyright © Philip M. Parker, INSEAD. Terms of Use.
Definitions: Hedging |
HedgingNoun1. Taking two positions that will offset each other if prices change and so limiting financial risk. 2. An intentionally noncommittal or ambiguous statement; "when you say `maybe' you are just hedging". Source: WordNet 1.7.1 Copyright © 2001 by Princeton University. All rights reserved. |
Date "hedging" was first used in popular English literature: sometime before 1719. (references) |
| Domain | Definitions |
Agriculture | Taking a position in a futures market opposite to a position held in the cash market to minimize the risk of financial loss from an adverse price change; a purchase or sale of futures contract as a temporary substitute for a cash transaction that will occur later (i.e., long hedge and short hedge). Hedgers use the futures markets to protect their business from adverse price changes. (references) |
Economics | The operation whereby a merchant transforms the contract amount of payment or receipt in foreign currency immediately into an obligation or a claim fixed in his own currency by means of a purchase or sale of foward exchan ge of the same amount. Source: European Union. (references) |
Finance | A compensating transaction, either spot or forward, for the purpose of off-setting the risk of future business or cash transaction in securities, currency or goods ; a transaction tending to the opposite effect of another transaction, engaged in to minimize a potential loss on the latter. Source: European Union. (references) |
| To protect oneself against possible loss by buying investments or foreign currency at a fixed price for delivery later. Source: European Union. (references) | |
| The purchase or sale of a commodity, security or other financial instrument for the purpose of offsetting the profit or loss of another security or investment. Thus, any loss on the original investment will be hedged, or offset, by a corresponding profit from the hedging instrument. (references) | |
Mining | The establishment of an opposite position on a futures market from that held and priced in the physical commodity. Without hedging, the physicalposition would be at risk to price fluctuations. (references) |
Source: compiled by the editor from various references; see credits. | |
(From Wikipedia, the free Encyclopedia)
Some form of risk taking is inherent to any business activity (if there were no risk, it is likely there would be no reward). Some forms of risk are "natural" to a business, whose competitive advantage is to manage the risk well, i.e. to minimise the costs of the risk, against the profit it is likely to achieve. Other forms of risk are not wanted, but cannot, as things stand, be avoided. For example someone who has a shop, takes care of the risk of competition, of poor or unpopular products, and so on, as "natural" risks. The risk of their stock being destroyed by fire is unwanted, however. Hedging consists in selling off the unwanted risk to those (such as those who have computed the actuarial value of fire risk) who have the ability or desire to take it.
For the following categories of risk, there now exist well-developed markets in which the risk is commoditised or securitised, or put into some OTC contract to be transferred between buyers and sellers.
Common forms of market risk are
Hedging Insurance risk
One of the oldest means of hedging against risk is the purchase protection against accidental loss or damage to property, or injury, loss of life. See Insurance.
Hedging Credit risk
Credit risk is the risk that money owing will not be paid by an obligor. Since credit risk is the natural business of banks, but an unwanted risk for commercial traders, naturally an early market developed between banks and traders, that invovled selling an obligations on at a discounted rate. See for example
See also
Source: adapted by the editor from Wikipedia, the free encyclopedia under a copyleft GNU Free Documentation License (GFDL) from the article "Hedging."
Synonym: HedgingSynonym: hedge (n). (additional references) |
Crosswords: Hedging |
| English words defined with "hedging": Carissa bispinosa ♦ hedge thorn, Hedging bill, horsebean ♦ Jerusalem thorn ♦ natal plum ♦ Parkinsonia aculeata. (references) |
| Specialty definitions using "hedging": currency hedging ♦ Dannocks ♦ gap management, going long, going short ♦ HEDGING CONTRACTS ♦ long hedge ♦ stripped mortgage-backed securities. (references) |
| Domain | Usage | |
Screenplays | By the way he's hedging maybe they got through. (The War of the Worlds; writing credit: Barré Lyndon; H.G. Wells) Come on, you're hedging. (All the President's Men; writing credit: Carl Bernstein; Bob Woodward) | |
Source: compiled by the editor from various references; see credits. | ||
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Periodicals |
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Source: compiled by the editor from various references; see credits. | |||
| Subject | Topic | Quote |
Business | Eltermin is a financial market for price hedging and risk management when buying and selling electrical power. (references) | |
Economic History | France | Banks offer hedging services against interest rate and currency fluctuations. (references) |
Bolivia | New laws regarding banking were passed in 1993. The Banking Law clarified the legality of such activities as factoring, leasing and foreign currency hedging. (references) | |
Japan | Large foreign firms have tended to use foreign sources for long-term financial needs, although increasingly sophisticated derivatives products are becoming available to assist in hedging each foreign investors' perceived risk. (references) | |
Political Economy | PHILIPPINES | Recent measures in response to speculative currency pressures and excessive foreign exchange volatility included monetary tightening (i.e., adjustments in reserve requirements and a generally cautious domestic interest-rate stance despite successive U.S. rate cuts); a lower over-the-counter ceiling for foreign exchange sales without documentation; expanded coverage of the BSP's Currency Risk Protection Facility (a nondeliverable forward hedging facility first introduced in December 1997 to reduce pressures in the spot market); and occasional liquidity infusions in the interbank foreign exchange market. (references) |
Trade | France | Banks also offer hedging services against interest rate and currency fluctuations. (references) |
Spain | Trading on credit is permitted and new hedging instruments, index and warrant options are available. (references) | |
Source: compiled by the editor from ICON Group International, Inc.; see credits. | ||
| "Hedging" is generally used as a lexical verb (-ing form) -- approximately 72.22% of the time. "Hedging" is used about 72 times out of a sample of 100 million words spoken or written in English. Its rank is based on over 700,000 words used in the English language. Some parts-of-speech are not covered due to the samples used by the British National Corpus. (note: percents less than one-hundredth of one percent have been omitted) |
| Parts of Speech | Percent | Usage per 100 Million Words | Rank in English |
| Lexical Verb (-ing form) | 72.22% | 52 | 47,145 |
| Noun (singular) | 15.28% | 11 | 106,044 |
| Adjective (general or positive) | 11.11% | 8 | 124,375 |
| Noun (proper) | 1.39% | 1 | 339,140 |
| Total | 100.00% | 72 | N/A |
Source: compiled by the editor from several corpora; see credits.
Expressions using "hedging": currency hedging ♦ Hedging bill ♦ hedging contracts. Additional references. | |
| Hyphenated Usage | |
Beginning with "hedging": hedging-bill. | |
| Source: compiled by the editor from various references; see credits. | |
| The following statistics estimate the number of searches per day across the major English-language search engines as identified by various trade publications. Hyperlinks lead to commercial use of the expression at Amazon.com. |
| Expression | Frequency per Day |
hedging | 137 |
currency hedging | 17 |
hedging strategy | 14 |
hedging plant | 11 |
derivative and hedging | 8 |
asphalt hedging | 7 |
exchange foreign hedging | 7 |
hedging interest rate | 6 |
commodity hedging | 6 |
foreign currency hedging | 5 |
cedar hedging | 5 |
dynamic hedging | 5 |
delta hedging | 4 |
hedging with option | 4 |
hedging bet | 4 |
definition hedging | 3 |
stock hedging | 3 |
country hedging | 3 |
bitumen hedging | 3 |
future hedging | 2 |
| Source: compiled by the editor from various references; see credits. | |
| Language | Translations for "hedging"; alternative meanings/domain in parentheses. | ||||||||||||||||||||||||||||||||||
Bulgarian | шикалкавене (fencing, quibble, quiddity, quip, runaround, shuffle), обезпечаване (provision, settlement), заграждане с ограда, заграждане с плет, покритие (effects), поддържане на огради и плетове. (various references) | ||||||||||||||||||||||||||||||||||
Danish | hedging (coverage, covering operation, hedge), risikoafdækning (coverage, covering operation, hedge, hedger), kurssikring (currency hedging, exchange risk cover), immunisering (coverage, covering operation, hedge, immunisation, immunization), daekningsforretning, dækningsforretning (coverage, covering operation, hedge), afdækning (coverage, covering operation, degradation, degrade, denudation, guard, hedge, insulation, lute, masking, screed, screeding). (various references) | ||||||||||||||||||||||||||||||||||
Dutch | hedging (coverage, covering operation, hedge), hedgen (coverage, covering operation, hedge), transacties tot dekking van koersrisico (currency hedging, exchange risk cover), dekkingsverkoop (coverage, covering operation, hedge), dekkingsaankoop (coverage, covering operation, hedge), contra-affaire (coverage, covering operation, hedge). (various references) | ||||||||||||||||||||||||||||||||||
Finnish | hedging (coverage, covering operation, hedge), suojautumisstrategia (coverage, covering operation, hedge), suojautumiskeino (coverage, covering operation, hedge), suojautuminen (coverage, covering operation, hedge), suojastus (coverage, covering operation, hedge). (various references) | ||||||||||||||||||||||||||||||||||
French | hedging (currency hedging), rebalancement, opération en contrepartie (currency hedging), opération de couverture du risque de change (currency hedging), opération de couverture (hedge), couverture des opérations terme (hedge), couverture d'actif (hedge), couverture (hedge). (various references) | ||||||||||||||||||||||||||||||||||
German | Hedging, Sicherungsgeschäft (coverage, covering operation, hedge), Kurssicherungsgeschaefte (currency hedging, exchange risk cover), Gegendeckung (coverage, covering operation, hedge), Eindeckung (coverage, covering operation, hedge), Deckungsgeschäft (coverage, covering operation, hedge), Deckung (caution money, collateral, collateral investment, collateral security, congruence, cover, coverage, covering, covering operation, defense, earnest, guard, hedge, margin, marking, meeting, recovery, security), Abschluss von Deckungsgeschäften (coverage, covering operation, hedge). (various references) | ||||||||||||||||||||||||||||||||||
Greek | κάλυψη κινδύνου υποτίμησης (coverage, covering operation, hedge), πράξη κάλυψης (coverage, covering operation, hedge), πράξεις κάλυψης του συναλλαγματικού κινδύνου (currency hedging, exchange risk cover), προσπάθεια εξασφάλισης έναντι αυξομειώσεων τιμών. (various references) | ||||||||||||||||||||||||||||||||||
Hungarian | kertelés (ambages, circumlocution, prevarication, shuffle, tergiversation). (various references) | ||||||||||||||||||||||||||||||||||
Italian | hedging, sfrondatura laterale, operazioni di copertura dei rischi di cambio (currency hedging, exchange risk cover), operazione di copertura (coverage, covering operation, hedge). (various references) | ||||||||||||||||||||||||||||||||||
Japanese Kanji | プロ野球 (10^2, hair, hair band, hair care, hair cream, hair curler, hair dresser, hair dryer, hair liquid, hair manicure, hair oil, hair spray, hairbrush, hairdye, hairpiece, hairpin curve, hairstyle, haste, header, heading, heather, hectare, hecto-, hectopascal, hedge, hedgehog, hegemony, intense smell, professional baseball, state of being furious or angry). (various references) | ||||||||||||||||||||||||||||||||||
Japanese Katakana | ヘッジング . (various references) | ||||||||||||||||||||||||||||||||||
Korean | 헤징. (various references) | ||||||||||||||||||||||||||||||||||
Manx | cleiy (delve, dig, dig out, digging, earthwork, harvest, hedge, quarry). (various references) | ||||||||||||||||||||||||||||||||||
Pig Latin | edginghay cobertura do risco de câmbios (currency hedging, exchange risk cover), cobertura do risco cambial (currency hedging, exchange risk cover), cobertura (black grave yard soil, blanket, canopy, cap, casing, coating, collateral security, cover, coverage, covering, covering operation, covering soil, coverture, cowl, cowling, dump cover, encasement, engine cowl, envelope, facing, facsimile, guard, hedge, hood, lap, lid, liner, lining paper, listening area, loose cover, mantle, paper liner, pillow-sham, roofing, slipover, spray coverage, topping, umbrella, vesture). (various references) ограждать ограждение. (various references) kosir (hedge-bill, hedging-bill). (various references) operación de cobertura de riesgo de cambio (currency hedging, exchange risk cover). (various references) hedging (coverage, covering operation, hedge), prissäkring (coverage, covering operation, hedge), kurssäkring (coverage, covering operation, hedge). (various references) | ||||||||||||||||||||||||||||||||||
Derivations | |
Words beginning with "hedging": hedgingly. (additional references) | |
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"Hedging" is suggested in spellcheckers for the following: hedgeing, Hedwig, Hendring, Hergig, Hodgins. (additional references) | |
| Source: compiled by the editor, based on several corpora (additional references). | |
| # of Phoneme Matches | Pronunciation | Word(s) rhyming with "hedging" (pronounced he"jing) |
| 4 | -e" j i ng | alleging, dredging, edging, fledging, pledging. |
| 3 | -j i ng | acknowledging, aging, arbitraging, arranging, avenging, averaging, besieging, bridging, bulging, challenging, changing, charging, converging, cringing, damaging, discharging, discouraging, disengaging, dislodging, disparaging, diverging, divulging, dodging, emerging, encouraging, engaging, enlarging, enraging, exchanging, foraging, forging, fudging, gauging, gouging, grudging, hemorrhaging, imaging, indulging, infringing, judging, leveraging, lodging, lounging, lunging, managing, merging, messaging, micromanaging, mischarging, mismanaging, mortgaging, nudging, obliging, outraging, overcharging, packaging, paging, pillaging, plunging, presaging, purging, raging, rampaging, ranging, ravaging, rearranging, recharging, repackaging, resurging, rummaging, salvaging, savaging, scavenging, scrounging, shortchanging, splurging, staging, surging, trudging, unchanging, urging, verging, waging. |
Source: compiled by the editor (additional references); see credits. | ||
Scrabble® Enable2K-Verified Anagrams | |
| Words within the letters "d-e-g-g-h-i-n" | |
-1 letter: edging, hinged, nighed. | |
-2 letters: deign, dinge, gighe, hinge, neigh. | |
-3 letters: deni, dine, ding, gied, gien, hide, hied, hind, nide, nigh. | |
-4 letters: den, die, dig, din, edh, egg, end, eng, ged, gen, ghi, gid, gie, gig, gin, hen, hid, hie, hin. | |
-5 letters: de, ed, eh, en, he, hi, id, in, ne. | |
| Words containing the letters "d-e-g-g-h-i-n" | |
+2 letters: hedgingly. | |
+3 letters: bedighting, delighting. | |
+4 letters: doggishness, lightninged, longsighted. | |
+5 letters: godfathering, hedgehopping. | |
| Source: compiled by the editor from various references; see credits. SCRABBLE® is a registered trademark. All intellectual property rights in and to the game are owned in the U.S.A and Canada by Hasbro Inc., and throughout the rest of the world by J.W. Spear & Sons Limited of Maidenhead, Berkshire, England, a subsidiary of Mattel Inc. Mattel and Spear are not affiliated with Hasbro. | |
Hexadecimal (or equivalents, 770AD-1900s) (references)48 65 64 67 69 6E 67 |
| Leonardo da Vinci (1452-1519; backwards) (references)
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| American Sign Language (origins from 1620-1817 in Italy and, especially, France) (references)
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| Semaphore (1791, in France) (references)
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| Braille (1829, in France) (references)
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Morse Code (1836) (references).... . -.. --. .. -. --. |
| Dancing Men (Sir Arthur Conan Doyle, 1903) (references)
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Binary Code (1918-1938, probably earlier) (references)01001000 01100101 01100100 01100111 01101001 01101110 01100111 |
HTML Code (1990) (references)H e d g i n g |
ISO 10646 (1991-1993) (references)0048 0065 0064 0067 0069 006E 0067 |
| British Sign Language (Fingerspelling, BSL; 1992, British Deaf Association Dictionary of British Sign Language) (references)
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Encryption (beginner's substitution cypher): (references)42717073758073 |
| 1. Definition 2. Synonyms 3. Crosswords 4. Usage: Modern | 5. Usage: Commercial 6. Quotations: Non-fiction 7. Usage Frequency 8. Expressions | 9. Expressions: Internet 10. Translations: Modern 11. Derivations 12. Rhymes | 13. Anagrams 14. Orthography 15. Bibliography |
Copyright © Philip M. Parker, INSEAD. Terms of Use.
