risk hedge

risk hedge definition - business

risk hedge

The taking of an offsetting position in related assets so as to profit from relative price movements. For example, an investor might purchase futures contracts on gold and sell short futures contracts on silver in the belief that gold will become relatively more valuable compared with silver over the life of the contracts.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.