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对冲 (duì chōng) — (noun) hedging (in finance); (verb) to hedge (against financial risk)

Definition

A finance term meaning to offset one investment's risk with another (e.g. a futures contract) so that losses in one are balanced by gains in the other. Used as both a verb ('to hedge') and a noun ('hedging').

noun
hedging (in finance)
verb
to hedge (against financial risk)

Examples

  • 对冲。
    duì chōng Shì yì zhǒng jiàng dī fēng xiǎn de fāng fǎ.
    Hedging is a method of reducing risk.
  • 对冲。
    Wǒ men xū yào duì chōng zhè ge tóu zī zǔ hé de fēng xiǎn.
    We need to hedge the risk of this investment portfolio.
  • 对冲。
    Jī jīn jīng lǐ tōng guò duì chōng cè lüè jiǎn shǎo sǔn shī.
    Fund managers reduce losses through hedging strategies.

Origin

Compound word
构词法gòucífǎ
偏正piānzhèngModifier + head

The first part narrows down the second: it says what kind of thing the head is.

对duìopposite
冲chōngoffset

对 marks the opposite direction, and 冲 gives the sense of offsetting risk.

Characters in this word

Two or more meaningful parts placed together so that their meanings combine into a new one.

This origin belongs to the traditional form 對; 对 is its simplified writing.

For the traditional form 對, the shape comes from an early drawing of 丵 (a digging tool), 土 (earth), and 又 (a hand); it may have meant developing land.

Open 对 →

Most characters — around four in five — are built this way: one part hints at the meaning, the other at the pronunciation.

This origin belongs to the traditional form 衝; 冲 is its simplified writing.

The simplified 冲 stands for more than one traditional character. In most words (冲, 冲动) it is 衝; in others (冲) it is 沖.

Meaning part形符xíngfú
行行xíng
Sound part声符shēngfú
重
重zhòng衝chōng
Same sound today

The traditional form 衝 shows 重 inside 行, with 行 as the meaning part and 重 as the sound part; the simplified 冲 is a later shorthand.

Open 冲 →
Appears in
Finance & Banking

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