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Old English hecg, originally any fence, living or artificial, from West Germanic *khagja (cf. Middle Dutch hegge, Dutch heg, Old High German hegga, German Hecke "hedge"), from PIE *kagh- "to catch, seize; wickerwork, fence" (cf. Latin caulae "a sheepfold, enclosure," Gaulish caio "circumvallation," Welsh cae "fence, hedge"). Related to Old English haga "enclosure, hedge" (see haw). Figurative sense of "boundary, barrier" is from mid-14c. Prefixed to any word, it "notes something mean, vile, of the lowest class" [Johnson], from contemptuous attributive sense of "plying one's trade under a hedge" (hedge-priest, hedge-lawyer, hedge-wench, etc.), a usage attested from 1530s.
late 14c., "make a hedge," also "surround with a barricade or palisade;" from hedge (n.). The sense of "dodge, evade" is first recorded 1590s. That of "insure oneself against loss," as in a bet, by playing something on the other side is from 1670s, originally with in; probably from an earlier use of hedge in meaning "secure (a debt) by including it in a larger one which has better security" (1610s). Related: Hedged; hedging. The noun in the wagering sense is from 1736.
The practice by which a business or investor limits risk by taking positions that tend to offset each other. For example, a business stands to lose money if the price of a commodity it holds declines, but it can offset this risk by agreeing to sell a specified amount of the commodity at a set price at some point in the future.
Note: Hedge funds, which are investment funds usually open only to the very wealthy, grew in the 1990s. The near failure of one such fund in 1998, Long-Term Capital Management, sent shock waves through Wall Street.
Something that offsets expected losses: People were buying gold as a hedge against inflationverb
(also hedge off) To transfer part of one's bets to another bookmaker as a means of reducing possible losses if too many of one's clients were to win: Big banks use derivatives to hedge their bets on which way the markets are going (1672+)