Couverture

A hedge is an operation aimed at reducing exposure to an asset class or risk, protecting one's portfolio against fluctuations.

In practice, hedging aims to cover, or partially or fully offset, the risk of variation in an asset (investment) or liability (loan).

Hedging therefore addresses risks arising from fluctuations in the prices of securities, currencies, interest rates, or commodity prices. This hedging is regularly achieved through the use of forward derivative instruments.