Source: https://mochatrade.com/learn/glossary/hedging

# Hedging
URL: https://mochatrade.com/learn/glossary/hedging
Last modified: 2026-10-17

Hedging is taking a second position that loses when your first one wins, to cut risk. [Market makers hedge every fill and hold no view](https://mochatrade.com/learn/us-market-structure/who-moves-us-stocks). For an Indian trader the hidden unhedged bet is usually the dollar, because [every dollar position is also a rupee bet](https://mochatrade.com/learn/start-here/us-markets-for-indian-traders); [a short contract](https://mochatrade.com/support/order-types-available-on-mochatrade) is a hedge in rupees, and US airlines that do not hedge fuel [wear the oil price](https://mochatrade.com/blog/crude-oil-war-and-slippery-slopes).

## Related terms

- Margin call: https://mochatrade.com/learn/glossary/margin-call
- Call option: https://mochatrade.com/learn/glossary/call-option
- Drawdown: https://mochatrade.com/learn/glossary/drawdown
- Margin trading: https://mochatrade.com/learn/glossary/margin-trading
- Liquidity: https://mochatrade.com/learn/glossary/liquidity
- Contango and backwardation: https://mochatrade.com/learn/glossary/contango-and-backwardation

Educational content only. Not investment advice. Leveraged products magnify losses as well as gains.