hedge

Vocabulary Word

Definition

'Hedge' is used when you want to reduce risk or protect yourself from a possible bad outcome. It's like wearing a helmet while biking to avoid getting hurt if you fall.

Examples in Different Contexts

In financial markets, traders hedge their investments to protect against unforeseen market swings. A portfolio manager might say, 'We've hedged our positions to safeguard against currency fluctuations.'

Practice Scenarios

Tech

Scenario:

With the increasing threats to data security, we must strengthen our data backup systems.

Response:

I agree. To hedge against data breaches, we might need to invest in more robust security systems.

Business

Scenario:

Given the volatility in the market, we need to plan our investments cautiously.

Response:

Perhaps, in order to hedge against financial losses, we should diversify our portfolio.