Hedge
Last reviewed 2026-08-07
Hedge — definition
An offsetting trade taken to reduce exposure to an existing position.
If you hold YES shares and the price moves heavily in your favor before resolution, selling some NO equivalent (or YES into the bid) locks in profit.
Hedging is how serious traders manage variance, not how degens chase moves.
Learn more: Prediction market arbitrage: how it really works
See also
Frequently asked questions
What does hedge mean in prediction markets?
An offsetting trade taken to reduce exposure to an existing position.
How does hedge work in practice?
If you hold YES shares and the price moves heavily in your favor before resolution, selling some NO equivalent (or YES into the bid) locks in profit.
Sources & further reading
- CFTC — Event contracts explainedU.S. Commodity Futures Trading Commission
- Kalshi — how prices and settlement workKalshi
- UMA Optimistic Oracle documentationUMA Protocol
Last reviewed 2026-08-07 · CollegePredictionMarkets.com