Definition of "Hedging"
Method of transferring risk to permit the risk bearer to assume two offsetting positions at the same time so that, regardless of the outcome of an event, the risk bearer is left in a no win/no lose position. For example, in the options market, a stock owner of an underlying stock can write calls or buy puts. In the same options market, the short sellers of the underlying stock can buy calls or write puts.
Popular Insurance Terms
States that preclude the placement of surplus lines with particular insurance companies. ...
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Total amount of insurance coverage available for an insured. ...
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Model act written and published by the national association of insurance commissioners (naic) whose purpose it is to regulate brokers who control insurance companies. The act permits the ...
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