Risk
What is hedging?
Taking a position that reduces a risk you already carry.
Explained in more detail
A hedge is insurance, not a bet. It costs something and it limits your gain as well as your loss. Buying a derivative hoping it multiplies is speculation, even though it uses the same instrument.
An example
For instanceA fund buying protection against a fall in a portfolio it already owns.
Why this matters to you
You will meet this word in broker apps, company results and market news. Knowing what it means is not the goal on its own. The goal is being able to judge whether a number is good or bad for the investment you are actually holding.
On AlphaVik, any time hedging appears in a view or a lesson, you can hover or tap the word and this explanation comes with it. You never have to leave the page to look something up.