What is the opposite of a hedge?
The opposite of a hedge is leverage (aka gearing). A hedge is where you spend money to reduce your exposure. Leverage is where you spend money to increase your exposure. Spread bets are a form of leverage - that's what makes them such an effective way to lose all your money, quickly. The opposite of a hedge is nothing.  Because if you don't want to hedge you bets, you don't, therefore you merely have the original bet. The opposite state of being hedged, is being unhedged. I guess the opposite of being hedged is being unhedged. Typically, a hedge is an additional position that you would take on in order to mitigate the potential for losses on another position. I'll give an example: Say that I purchase 100 shares of stock XYZ at $10 per share because I believe its price will increase in the future.  At that point, my full investment of $1000 is at risk, so the position is not hedged. If the price of XYZ decreases to $8, then I've lost $200.  If the price of XYZ increases to $12, then I've gained $200; the profit/loss curve has a linear relationship to the future stock price. Suppose that I decide to hedge my XYZ position by purchasing a put option. I purchase a single option contract (corresponding to my 100 shares) with a strike price of $10 and an expiration date in January 2013 for a price of $0.50/share. This means that until the contract expires, I can always sell my XYZ shares for a minimum of $10.  Therefore, if the price of XYZ decreases to $8, then I've only lost $50 (the price of the option contract), compared to the $200 that I would have lost if the position was unhedged.  Likewise, however, if the price increases to $12, then I've only gained a net total of $150 due to the money I spent on the hedge. (the details of how much money you would actually lose in the hedged scenario are simplified out above; even out-of-the-money options retain some value before expiration, but pricing of options is outside of the scope of this post) So, as a more pointed answer to your question, I would say that the hedged/unhedged status of a position can be characterized by its potential for loss. If you don't have any other assets that will increase in value to offset losses on your position of interest, I would call it unhedged. "There is no opposite of a hedge, except not having a hedge at all. A ""hedge"" isn't directional. If you are short, you hedge by having something that minimizes your losses if you are wrong. If you are long, you hedge by having something that minimizes your losses if it decreases in value. If you own a house, you hedge by having insurance. There are ""hedged bets"" and ""unhedged bets""" I'd say the opposite of hedging is speculating.  If you are convinced an asset will appreciate in value, or rather the probability of gains is enough to induce you to hold the asset, you are a speculator.  There are lots of ways of speculating, including holding risky assets without hedging that risk and possibly magnifying that risk and return via leverage or the embedded leverage in a derivative contract. Generally speaking, if in expectation you are paying to reduce your risk, you are a hedger.  If you are (in expectation) being paid to bear the risk that otherwise someone else would bear, you are a speculator.  The word speculation has been tainted by politicians and others trying to vilify the practice, but at the end of the day it's what we are all doing when we buy stock or any other risky asset.
For a cheaper hedge , you can try a call spread. e.g if you shorted a stock at 40 but are worried that it can get bought out for 60. then buy a 50-60 bull call spread with appropriate number of contracts or even 50-55. this is better than just buying a 50 call as it will be expensive. Also the other option is not to short but buy a debit bear put spread 40-30 near the money and then buy an out of money call spread ( 55-60). "Whoever is not ""anti trump"" is a either being conned, an idiot or someone very untrustworthy. Take it from an unbiased European.  However, we agree on one thing. This article is a bit to loosely related to economics to be in this sub, at least IMO." "he is saying that ""QE"" meaning ""quantitative easing"" meaning ""the theory that the government flooded the markets with money, artificially driving up the price of stocks"" meant that hedge funds, which HEDGE, and benefit from an up-and-down market, couldn't win in a market where it just kept going up.  It's basically a conspiracy theory bears have been pushing for years ""QE artificially inflated the market, it's gonna crash!""" Not directly an answer to your question, but somewhat related: There are derivatives (whose English name I sadly don't know) that allow to profit from breaking through an upper or alternatively a lower barrier. If the trade range does not hit either barrier you lose. This kind of derivative is useful if you expect a strong movement in either direction, which typically occurs at high volume. Headwinds in an economic situation represent events or conditions e.g. a credit crisis, rising costs, natural disasters, etc, that slow down the growth of an economy. So headwinds are negative. Tailwinds are the opposite and help to increase growth of an economy. Roll it into another put with a lower strike and hope it keeps going down.  At the very least it will defray the cost of the long position.  Ps I think you're looking for the word hedge not lever. "I saw that an answer hasn't been accepted for this yet: Being bearish is a good hedging strategy. But being hedged is a better hedging strategy. The point being that not everything in investments is so binary (up, and down). A lot of effective hedges can have many more variables than simply ""stock go up, stock go down"" As such, there are many ways to be bearish and profit from a decline in market values without subjecting yourself to the unlimited risk of short selling. Buying puts against your long equity position is one example. Being long an ETF that is based on short positions is another example." There are several ways to protect against (or even profit from) a market correction. Hedge funds do this by hedging, that is, buying a stock that they think is strong and selling short a paired stock that is weak. If you hold, say, a strong retail company in your portfolio, you might sell short an equal weight of a weak retail company.  These are like buying insurance on your portfolio. If you own 300 shares of XYZ, currently trading at $68, you buy puts at a level at a strike price that lets you sleep at night. For example, you might buy 3 XYZ 6-month puts with a strike price of $60. A disadvantage is that the puts are wasting assets, that is, their time premium (which you paid for at the outset) becomes zero at expiration. (This is why it is like insurance. You wouldn't complain that your insurance premium was lost when you purchase insurance on your house and the house doesn't burn down, would you? Of course not. The purpose of the insurance is to protect your investment.) Note that as these puts are married, they only protect your portfolio. Instead of profiting from a correction, you would merely protect your portfolio during a correction. (No small feat!) If your portfolio is similar to the market, you can buy S&P index puts. If your market reflects a lot of technology, you can buy technology sector puts.  Say you have a portfolio of $80K that reflects the market. You could buy out-of-the-market puts (again reflecting your tolerance for loss). Any losses in your portfolio after the puts go in-the-money would be (more or less) offset by gains in the puts.  An advantage is that the bid/ask spread is smaller for the S&P. You would pay less for the protection. Also, the S&P puts are cash settled (meaning you get money put in your account on the business day after expiration day). A disadvantage is that the puts do not linearly go up as the market drops. (Delta hedging is a big deal in and of itself.) Another disadvantage is that they are wasting assets (see the Married puts section, previous). While the S&P puts can be used to maintain your market portfolio in the midst of a correction, you could purchase more puts than needed. If you had correctly timed the market, then your portfolio with puts would increase. (Your mileage may vary; some have predicted an imminent market crash way too often.) Collars involve selling out-of-the-money calls and using the premiums to buy out-of-the-money puts. There are many varieties of collars, but the most straightforward is to sell 1 call and buy 1 put for every 100 shares. (This can also be done for index puts and calls.) This has the effect of simultaneously: You get your insurance for almost free. But again, it is protecting your portfolio.  As the name implies, you make money when the market goes bearish.  Bear put spreads involve buying puts at a close strike price and selling an equal number of puts at a lower strike price than the first. You have a defined maximum loss (the premium you paid for the higher put minus the premium you received for the lower put). You have a defined maximum gain (the difference between strikes minus the defined maximum loss).  Buy S&P 500 index puts. If you buy deep out-of-the-money puts, it won't cost much, but you have little probability of it paying off. But if they go in-the-money, there could be a sizable payoff. This is similar to putting one chip on red 18 on the roulette wheel. But rather than paying off 35:1, it is a variable payoff. If you're $1 in the money, you just get $100. If you're $12 in the money, you have a $1200 payoff.  If you buy at-the-money puts, it will cost a lot, and your probability will be about 1 in 2 that you will pay off. In our roulette analogy, this is like putting 30 chips on the Even bet of the roulette wheel. The variable payoff is as in the previous paragraph. But you're more likely to get a payoff. And you will lose it all of the roulette ball lands on an Odd number, 0, or 00. (That is, the underlying of your put goes up or stays the same.) If your research shows you what good stocks to buy, it may also tell you which stocks are ripe for a fall. You could short-sell these stocks or buy puts on them.  Similar to short-selling stocks or buying puts, you could sell short overpriced sectors or buy puts on them. There are ETFs that will allow you benefit from falling prices without needing to have a margin agreement or options agreement in place.  Sorry to have a lengthy answer. Many other answers emphasize that one shouldn't try to time the market. But that is not the OP's question. Provided here are both: Yah, I haven't played in this space very much. My only exposure was visiting a weather insurance company who wanted the fund I was at to take the other side of their bets - paying us a fixed amount and having us cover them whenever their losses were over a certain amount for the month. It looked like a pretty bad deal, but apparently some multi-strat hedge-fund eventually went with it for the uncorrelated beta. There is no evidence that QE had a negative effect on hedge fund alpha. If you claim, that hedge funds are not able to deliver positive risk adjusted return in up markets - this is wrong assumption. It's been proven, that with the leverage they get, hedge funds can perform better in bullish markets.  We recently investigated the performance of 180 Danish funds in the past two decades. We found no evidence that they could outperform their relative benchmarks. Not even that, but we also assumed zero costs for investor, where in reality costs can range from 2 to 5%. Danish funds not only fail in term of positive risk adjusted return, but they also struggle to cover their costs.  TL:DR The lover the cost - the higher the return. Evidence says - Go passive! Mythos Hedgefonds. Einblick in die Charkateristika, Bedeutung und Strategien von Hedgefonds. In der heutigen Zeit hört man immer öfters von der Macht der Hedgefonds. Beinahe täglich prangern die Medien Hedgefonds als sogenannte Sündenböcke an. Dabei nützten diese gezielt die falschen Vorstellungen oder das Nichtwissen der Menschen über diese Materie aus. Diese Homepage soll einem einen ersten Einblick in das Gebiet der Hedgefondsindustrie gewähren. Denn erst nachdem man selbst ein Grundverständnis von der Materie besitzt, kann man darüber urteilen. "First off, the jargon you are looking for is a hedge. A hedge is ""an investment position intended to offset potential losses/gains that may be incurred by a companion investment"" (http://en.wikipedia.org/wiki/Hedge_(finance)) The other answers which point out that put options are frequently used as a hedge are correct. However there are other hedging instruments used by financial professionals to mitigate risk.  For example, suppose you would really prefer that Foo Corporation not go bankrupt -- perhaps because they own you money (because you're a bondholder) or perhaps because you own them (because you're a stockholder), or maybe you have some other reason for wanting Foo Corp to do well. To mitigate the risk of loss due to bankruptcy of Foo Corp you can buy a Credit Default Swap (http://en.wikipedia.org/wiki/Credit_default_swap). A CDS is essentially a bet that pays off if Foo Corp goes bankrupt, just as insurance on your house is a bet that pays off if your house burns down.   Finally, don't ever forget that all insurance is not just a bet that the bad thing you're insuring against is going to happen, it is also a bet that the insurer is going to pay you if that happens.  If the insurer goes bankrupt at the same time as the thing you are insuring goes bad, you're potentially in big trouble." Let's start with a definition: A Collar is a protective strategy for a position in the underlying instrument created by purchasing a put and selling a call to partially pay for the put option purchased or vice versa. Based on that definition, there are two different types of collars. Each is a combination of two simpler strategies: References Multi-Leg Options Orders VXX VZX XVIZ and there are plenty others correlated to market volatility if you want the wildest hedge, use VXX, it is also the most liquid Investopedia does have tutorials about investments in different asset classes. Have you read them ? If you had heard of CFA, you can read their material if you can get hold of it or register for CFA. Their material is quite extensive and primarily designed for newbies.  This  is one helluva book and advice coming from persons who have showed and proved their tricks. And the good part is loads of advice in one single volume. And what they would suggest is probably opposite of what you would be doing in a hedge fund. And you can always trust google to fish out resources at the click of a button.