Trading Glossary
Hedging:
The action of reducing the risk of an outright position in one Market by taking an opposite position in a similar or derivative market, e.g. if you had an up bet in the UK 100 you might enter a down bet in the DAX. In this case although the Hedge would not be exact, it is unlikely that the UK 100 will move heavily in the opposite direction to the DAX (but, of course, not impossible).
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