Hedging
Definition
Taking a position in a futures market opposite to a position held in the cash market to minimize the risk of financial loss from an adverse price change; or a purchase or sale of futures as a temporary substitute for a cash transaction that will occur later. One can hedge either a long cash market position (e.g., one owns the cash commodity) or a short cash market position (e.g., one plans on buying the cash commodity in the future).
Related Terms Other terms related to 'Hedging' starting with the letter 'H' Henry Hub, Head and Shoulders, Hardening, Hedge Ratio, Horizontal Spread Browse by Letter » A B C D E F G H I J K L M N O P Q R S T U V W Y Z
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