![Hedging Transaction](https://img-cdn.financeunlocked.com/headers-images/euromoney/3.jpg?ik-sdk-version=javascript-1.0.3)
Glossary
Investment Management
Hedging Transaction
A hedging transaction is a transaction that is undertaken in order to reduce the risk of any underlying trade or position. An example might be the sale of S&P futures to hedge an underlying long position in a specific S&P company.