Hedger


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Hedger

An investor who takes steps to reduce the risk of an investment by making an offsetting investment. There are a large number of hedging strategies that a hedger can use. Hedgers may reduce risk, but in doing so they also reduce their profit potential.

Hedger.

Hedgers in the futures market try to offset potential price changes in the spot market by buying or selling a futures contract.

In general, they are either producers or users of the commodity or financial product underlying that contract. Their goal is to protect their profit or limit their expenses.

For example, a cereal manufacturer may want to hedge against rising wheat prices by buying a futures contract that promises delivery of September wheat at a specified price.

If, in August, the crop is destroyed, and the spot price increases, the manufacturer can take delivery of the wheat at the contract price, which will probably be lower than the market price. Or the manufacturer can trade the contract for more than the purchase price and use the extra cash to offset the higher spot price of wheat.

References in periodicals archive ?
Guy Hedger was shot dead during the botched burglary at his home
Mr Hedger was marketing director at Avonbourne International and Business and Enterprise Trust, which runs colleges and a primary school in the Bournemouth area.
The FASB is less concerned about how much work hedge accounting creates for corporate hedgers, than about the impact on users of corporate financial statements," she says.
NCDEX will continue to focus on commodities that are crucial to the Indian economy as well on increasing the participation of hedgers - those with genuine exposure to the underlying commodity such as producers, processors, industrial consumers, exporters, importers and traders.
Drawing upon the work of Kaplan (1999), Hedger (2012) adopts a strict distinction between expressions with purely descriptive and purely expressive content such that the content of each expression is either descriptive or expressive but not mixed.
Hedger has been with A-G since 1991 and became its president in 2002.
At some point, hedgers must honour their commitment to cover losses.
Dollison accused Hedger of throwing lit cigarettes down his shirt, hitting him across the buttocks with boards, pulling down his pants and other indignities.
The first sentence of Cather's story places us in the heart of Greenwich Village: "Don Hedger had lived for four years on the top floor of an old house on the south side of Washington Square, and nobody had ever disturbed him.
Hedger said: "He caught his hind joint on his box and had to have some time off but that wasn't such a bad thing because he likes to be a bit fresh.
Still, it's reasonable to expect that the second seller perceives himself as a hedger, while the first probably does not.
FIT trials at tub/shower producers showed dramatically reduced overspray and bounce-back, Hedger says.