buying hedge

Long Hedge

The purchase of a futures contract with the intention of accepting delivery of the underlying asset. One conducts a long hedge in order to lock in a price for an asset one must purchase in the future. This protects the holder of the futures contract from volatility in the underlying asset's price. If the spot price of the underlying asset moves in a direction more beneficial for the holder, he/she can sell the futures contract and buy the asset at the spot price. An example of a long hedge is a situation in which a company needs to buy oil by June. The spot price of oil may be $70 per barrel, but the futures price for June delivery may be only $60. The company would choose to buy the futures contract at $60 per barrel. A long hedge is also called a buy hedge.

buying hedge

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Hedge funds are buying companies while private equity funds are buying hedge funds.
Taiwan has barred all securities and investment trust companies from selling or buying hedge funds linked to him.
Yet, paradoxically, more and more mortgage bankers are only now inquiring about, and actually buying hedges for servicing.
Wolcott suspects that mortgage bankers may be buying hedges they don't need because they worry too much about prepayment risk.