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
Smallest number of individuals for which an insurance company will issue a policy. A minimum number is required because the fixed expenses of placing a policy on the books exist regardless ...
disposition of a claim or policy benefit. Policies may specify time limits for payment of claims or benefits and designate various methods of settlement at the option of the insurer or the ...
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Trade association whose membership is comprised of section 403(b) plan providers and practitioners. This association has an educational institute that grants the Certified Specialist in ...
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Forgery insurance covering securities issues such as stocks and bonds. They protect the issuer of securities against forgery of the securities. ...
A valuation of risk of an individual or organization. ...
Formerly an employer's defense under which an injured employee had to bring a cause for action against the fellow employee causing the injury, not the employer. Workers Compensation laws ...
Separate trust established by a charitable entity whose purpose is to receive contributions from numerous donors. All the donors' contributions are commingled. Each donor can retain a ...
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