To me (I am a trader) hedging is a meaningless word unless it is followed by "Of what?". Because as a corporate or as a trader we are trying to avoid some events ( like the event of going bankrupt, possibility of a blow up , avoiding to get fired) and hedging is a way to ensure that . If hedging is like what is being described in text books ( a series of payoff which is exactly opposite to the payoff obtained from an initial transaction), then all traders will become redundant because traders are being paid for taking risk and if they hedge (in the so called text book way), no body'll hire them . The job of trader is to take the risk (the fat-tailed event from where the profit, money and big bonus comes) and hedging is only to ensure that he is in the game ( and does not die or blow up). So to me first hedging is a verb and not a noun (means it requires an action and is ever changing with the change in the environment). Also all phrases like "delta-hedging", "gamma-hedging" and so on requires to be asked the same followup question "of what". Rest here is how Merriam webster describes hedging (
http://www.m-w.com/dictionary/hedging), I think the last one is beautiful HedgeOne entry found for hedge. Main Entry: 2hedgeFunction: verbInflected Form(s): hedged; hedgingtransitive verb1 : to enclose or protect with or as if with a hedge : ENCIRCLE2 : to hem in or obstruct with or as if with a barrier : HINDER <hedged about by special regulations and statutes -- Sandi Rosenbloom>3 : to protect oneself from losing or failing by a counterbalancing action <hedge a bet>intransitive verb1 : to plant, form, or trim a hedge2 : to evade the risk of commitment especially by leaving open a way of retreat : TRIM3 : to protect oneself financially: as a : to buy or sell commodity futures as a protection against loss due to price fluctuation b : to minimize the risk of a bet Text