Book definition says ‘Hedging is an kind of investment to reduce the risk of adverse price fluctuations in an asset ‘. A hedge can be made from many types of financial instruments, including stocks, insurance, forward contracts, swaps, options, futures contracts. Hedging in a way helps you to protect your trading positions from making a loss. Hedging is a Skill to safeguard your position in the market ,so it does not get affected by any adverse movements .Whenever you buy any stock you have exposed yourself in market. What one exactly want to do while hedging is minimizing the risk .