// TRADING TERMINOLOGY
What is Hedging?
An investment made with the intent of reducing the risk of adverse price movements in an asset.
In-Depth Explanation
Traders often hedge by taking an opposite position in a related asset. For example, a gold miner might sell gold futures to "lock in" a price for their future production.
Practical Example
"To hedge a long UK stock portfolio, a trader might short the FTSE 100 index."
Related Terms
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