What is hedgeing?

Question

What is hedgeing?

Answer 1

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).

Answer 2

I think it's spelled 'hedging' - and basically it means to avoid being direct in a response...example of use in sentence:  "She asked me if I liked her dress, and since it was really an ugly dress, I had to do some hedging...told her it was a lovely colour."