Arbitrage vs Hedge - What's the difference?
arbitrage | hedge |
(finance) A market activity in which a security, commodity, currency or other tradable item is bought in one market and sold simultaneously in another, in order to profit from price differences between the markets.
* {{quote-book, a. 1973, , The Intelligent Investor
, passage=But in recent years, for reasons we shall develop later, the field of "arbitrages and workouts" became riskier and less profitable.}}
(finance) To employ
* {{quote-book, 1961, Maurece Schiller, Fortunes in Special Situations in the Stock Market
, passage=He has arbitraged by purchasing in one market and simultaneously selling the same or similar merchandise in another market. }}
(finance) To engage in arbitrage in, between, or among
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A thicket of bushes, usually thorn bushes; especially, such a thicket planted as a fence between any two portions of land; and also any sort of shrubbery, as evergreens, planted in a line or as a fence; particularly, such a thicket planted round a field to fence it, or in rows to separate the parts of a garden.
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*:But then I had the [massive] flintlock by me for protection. ΒΆ, and a 'bead' could be drawn upon Molly, the dairymaid, kissing the fogger behind the hedge , little dreaming that the deadly tube was levelled at them.
A mound of earth, stone- or turf-faced, often topped with bushes, used as a fence between any two portions of land.
A non-committal or intentionally ambiguous statement.
(lb) Contract or arrangement reducing one's exposure to risk (for example the risk of price movements or interest rate movements).
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Used attributively, with figurative indication of a person's upbringing, or professional activities, taking place by the side of the road; third-rate.
*, II.2:
*:Attalus made him so dead-drunke that insensibly and without feeling he might prostitute his beauty as the body of a common hedge -harlot, to Mulettiers, Groomes and many of the abject servants of his house.
*1749 , (Henry Fielding), , Folio Society 1973, p.639:
*:He then traced them from place to place, till at last he found two of them drinking together, with a third person, at a hedge -tavern near Aldersgate.
*{{quote-book, 1899, (Henry Rider Haggard), title=
, passage=This particular wheelwright is only a hedge carpenter, without even a shop of his own,
To enclose with a hedge or hedges.
To obstruct with a hedge or hedges.
* Bible, Hos. ii. 6
* Milton
(finance) To offset the risk associated with.
To avoid verbal commitment.
To construct or repair a hedge.
(finance) To reduce one's exposure to risk.
In finance terms the difference between arbitrage and hedge
is that arbitrage is a market activity in which a security, commodity, currency or other tradable item is bought in one market and sold simultaneously in another, in order to profit from price differences between the markets while hedge is contract or arrangement reducing one's exposure to risk (for example the risk of price movements or interest rate movements).In intransitive finance terms the difference between arbitrage and hedge
is that arbitrage is to employ arbitrage while hedge is to reduce one's exposure to risk.In transitive finance terms the difference between arbitrage and hedge
is that arbitrage is to engage in arbitrage in, between, or among while hedge is to offset the risk associated with.arbitrage
English
(wikipedia arbitrage)Noun
citation
Derived terms
* arbitrageurExternal links
* *Verb
(arbitrag)citation
hedge
English
Noun
(wikipedia hedge) (en noun)A Farmer's Year: Being His Commonplace Book for 1898, page=222
Derived terms
* hedge fund * hedgehog * hedgerow * hedgyVerb
(hedg)- to hedge a field or garden
- I will hedge up thy way with thorns.
- Lollius Urbius to hedge out incursions from the north.
- He carefully hedged his statements with weasel words.
