Advanced English Dialogue for Business – Short hedge

Listen to a Business English Dialogue about Short hedge

Adam: Hey Samantha, have you ever heard of a short hedge in finance?

Samantha: Yeah, I think it’s when you use financial instruments to protect against the risk of falling prices in an asset.

Adam: That’s right. It’s like insurance against potential losses.

Samantha: So, how exactly does it work?

Adam: Well, let’s say you’re a farmer and you’re worried about the price of your crops dropping. You could use a short hedge to lock in a minimum price for your crops.

Samantha: Ah, I see. So, even if prices fall, you’re protected by the hedge.

Adam: Exactly. It helps to minimize the impact of price fluctuations on your business.

Samantha: That sounds like a useful strategy for managing risk.

Adam: Definitely. It’s all about mitigating potential losses and ensuring stability in your business operations.

Samantha: Thanks for explaining that, Adam. I’ll have to look into incorporating short hedges into my financial planning.

Adam: No problem, Samantha. It’s always good to be proactive about managing risk in business.