hedger
n.
one who repairs and trims hedges; one who hedges in betting
Hedge (finance)
In
finance, a hedge is an investment that is taken out specifically to reduce or cancel out the
risk in another investment. Hedging is a
strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity. Typically, a hedger might invest in a
security that he believes is under-priced relative to its "fair value" (for example a mortgage loan that he is then making), and combine this with a
short sale of a related security or securities. Thus the hedger is indifferent to the movements of the market as a whole, and is interested only in the performance of the 'under-priced' security relative to the hedge.
Holbrook Working, a pioneer in hedging theory, called this strategy "speculation in the basis,"
[1] where the basis is the difference between the hedge's theoretical value and its actual value (or between spot and
futures prices in Working's time).
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hedger
Noun
1. a respondent who avoids giving a clear direct answer
(synonym) equivocator
(hypernym) respondent, responder, answerer
(derivation) hedge, fudge, evade, put off, circumvent, parry, elude, skirt, dodge, duck, sidestep
2. someone who counterbalances one transaction (as a bet) against another in order to protect against loss
(hypernym) speculator, plunger
(derivation) hedge
3. a gardener who takes care of and trims hedges
(hypernym) gardener
Hedger
(n.)
One who makes or mends hedges; also, one who hedges, as, in betting.
Webster's Revised Unabridged Dictionary (1913), edited by Noah Porter.
About
Hedger
One who hedges; one who attempts to transfer the risk of price change by taking an opposite and equal position in the futures or futures option market from that position held in the cash market.