A major reason for hedging is to protect yourself from potential losses on an existing deal if it moves in the opposite direction of what you wanted. If you believe your trade will go in the opposite direction of your desired direction over time, there are a number of reasons why you may wish to hedge rather than close it out.
Overconcentration. You may have a high level of exposure to a certain investment (for example, business stock) and wish to mitigate some of the risk.
Implications on taxes. When you sell a position, you may want to avoid creating a taxable event.
As opposed to individual investors, corporate hedging can assist in ensuring greater cost certainty in the future. Airlines are a common example of this sort of hedging, as they purchase oil futures several months in advance. By hedging costs, airlines can better budget for future expenses. Without hedging, airlines would be particularly vulnerable to changes in oil prices.