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An investor who takes steps to reduce the risk of an investment by making an offsetting investment. There are a large number of hedging strategies that a hedger can use. Hedgers may reduce risk, but in doing so they also reduce their profit potential.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


Hedgers in the futures market try to offset potential price changes in the spot market by buying or selling a futures contract.

In general, they are either producers or users of the commodity or financial product underlying that contract. Their goal is to protect their profit or limit their expenses.

For example, a cereal manufacturer may want to hedge against rising wheat prices by buying a futures contract that promises delivery of September wheat at a specified price.

If, in August, the crop is destroyed, and the spot price increases, the manufacturer can take delivery of the wheat at the contract price, which will probably be lower than the market price. Or the manufacturer can trade the contract for more than the purchase price and use the extra cash to offset the higher spot price of wheat.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Hedger's runner C'Est No Mour finished third under Simon Walker in a race won by the Peter Chapple-Hyamtrained Medalla De Oro, who was ridden by Gold Cup winner Adrian Maguire's son Finian.
Guy Hedger was shot dead during the botched burglary at his home
Mr Hedger was marketing director at Avonbourne International and Business and Enterprise Trust, which runs colleges and a primary school in the Bournemouth area.
When it comes to changes around disclosure rules, the exposure draft would actually create more work for some corporate hedgers by requiring "added guidance on qualitative disclosure of quantitative hedging goals." In addition, "companies have to change their tabular formats to show the impact of derivatives on specific lines in the financial statements," Kane says.
Drawing upon the work of Kaplan (1999), Hedger (2012) adopts a strict distinction between expressions with purely descriptive and purely expressive content such that the content of each expression is either descriptive or expressive but not mixed.
I thank Dr Gregory Hedger, director of Qatar Academy, and his team for contributing so much to the personal development of our graduates and, through them, to the development of our society." Hedger continued, "There are few people in the world who can claim to have had the quantity of resources, dedication of teachers, commitment of parents and quality of education you have received.
Marine seismic acquisition equipment manufacturer Bolt Technology Corporation (NASDAQ:BOLT) said on Wednesday that its board of directors has appointed Michael C Hedger as executive vice president.
As conditions deteriorate further, the hedger may lose his capital and worse, may end up with enormous debt to lenders.
Lynne Kotlarzewski, Mike Hedger, Anne Bill, Jan Gardner, John Bill, Rachel Hards; Dale Bostock, Max Grimson; Michael Powell; Lesley James, Kate Sammons, Sally Bevins, Jane Brennan; Matt Hardy, Andy Turpin, Martin Coyne, Richard Mason; Gordon Keir, Graham Carter, Chris Tucker, Allan Donald
Democratic-NPL candidate Kristin Hedger proposes more Internet outreach as well as a program to mirror Pennsylvania's Vote with a Vet program.
He quit in March 2003 after being "fed up" with the physical abuse and racial jokes from his department manager, Chris Hedger, according to his lawsuit filed in U.S.
Cather's fullest description of her Greenwich Village is contained in her 1920 story, "Coming, Aphrodite!" (44) This story, which follows the love affair between painter Don Hedger and singer Eden Bower, has been called "Cather's Manifesto for Art"; (45) it also, I think, can be called Cather's Manifesto for Greenwich Village, for it offers Cather's alternative vision of Village fife when most reports identified the neighborhood as "Bohemia, Inc."