Deflected by the sun  +  600856 Mon, 01 Dec 08 08:33 AM Hedge: Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract. An example of a hedge would be if you owned a stock, then sold a futures contract stating that you will sell your stock at a set price, therefore avoiding market fluctuations. Investors use this strategy when they are unsure of what the market will do. A perfect hedge reduces your risk to nothing (except for the cost of the hedge). Hi, Teachers! Could anyone of you please provide me a clearer example of the financial term hedge as I can't figure out the one above. Many thanks in advance, Deflected by the... Joined on Sun, Nov 30 2008 New Member 34

	Mister Micawber  +  600857 Mon, 01 Dec 08 08:37 AM . Hedge:  any technique designed to reduce or eliminate financial risk; for example, taking two positions that will offset each other if prices change. . Mister Micawber Joined on Wed, Aug 4 2004 Yokohama Veteran Member 30,802 'The question is,' said Humpty Dumpty, 'which is to be master-- that's all.'

	Deflected by the sun  +  600877 Mon, 01 Dec 08 08:58 AM Perfectly understood. Thank you, Mister Micawber! Just one more question: what does in a related security mean? Deflected by the...