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Hedging
- Hedging refers to a risk management strategy used by investors to reduce their exposure to potential losses.
- It involves taking a position in one asset to offset the risk associated with another asset. In the crypto world, investors may hedge their positions by using derivatives such as futures contracts or options, or by diversifying their portfolio across different cryptocurrencies or assets.
- The goal of hedging is to protect against adverse price movements while still maintaining the potential for gains
Discover other #Advanced terms in DEXTool's Crypto Glossary
ETF (Exchange-Traded Fund) Stock-to-flow WAGMI NGMI Wash Trading Hedging Bearwhale Apes Laser Eyes Shilling Bagholder Layer 1 DEG (Decentralized Ecosystem Governance) Permissionless development Cross-chain Stop Loss TVL (Total Value Locked) Miner Extractable Value (MEV) TPS (Transaction per second) Total exchange volume