selling hedge

selling hedge
also: short hedge Selling futures contracts to protect against possible declining prices of commodities that will be sold in the future. At the time the cash commodities are sold, the open futures position is closed by purchasing an equal number and type of futures contracts as those that were initially sold. The practice of offsetting the price risk inherent in any cash market position by taking an equal but opposite position in the futures market. Hedgers use the futures markets to protect their business from adverse price changes. Chicago Board of Trade glossary
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See short hedge. The CENTER ONLINE Futures Glossary

Financial and business terms. 2012.

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