Trading glossary · risk

hedge

A second trade that protects you, going up when your first trade goes down, like insurance.

The fuller meaning

A position taken to offset the risk of another, reducing exposure rather than seeking profit. In India, currency derivatives involving the rupee are allowed only to hedge real currency exposure, not for speculation.

hedge, also called hedging.

Related words

1% rule · ATR stop · average loss · average win · breakeven · breakeven win rate · correlation · daily loss limit · drawdown · equity curve