Hedging Agreement
/ˈhɛdʒɪŋ əˌgriːmənt/
Definitions
- (n.) A contract between parties to reduce or offset financial risk, typically by fixing future prices or rates.
The company entered into a hedging agreement to protect against currency fluctuations.
- (n.) An agreement to mitigate exposure to market volatility through derivatives or other financial instruments.
Hedging agreements are common in commodity trading to limit losses due to price changes.
Forms
- hedging agreement
- hedging agreements
Related terms
See also
Commentary
Commonly used in financial and commercial law to manage risk; clarity in specifying terms and underlying exposures is essential when drafting.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.