Buy hedge

Buy 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.
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High-net-worth clients -- with over $50 million of assets -- will be able to buy hedge funds and private equity via the BIC exemption.
In addition to problems of raising money to buy hedge investments or finding assets that can serve as collateral for hedge investments, there is the issue of counterparty risk for those airlines who choose and who are able to afford hedging.
In order to reduce the risk the issuer is forced to buy hedge, whose price usually neutralizes the advantage of lower nominal interest rates.
16 October 2012 - US financial services provider State Street Corporation (NYSE:STT) said today it had completed a USD550m (EUR423.4m) deal to buy hedge fund administrator Goldman Sachs Administration Services (GSAS) from investment bank Goldman Sachs Group Inc (NYSE:GS).
US financial services provider State Street Corp (NYSE:STT) said it had struck a USD550m (EUR447.7m) deal to buy hedge fund administrator Goldman Sachs Administration Services (GSAS) from investment bank Goldman Sachs Group Inc (NYSE:GS).
17 July 2012 a[euro]" US financial services provider State Street Corp (NYSE:STT) said today it had struck a USD550m (EUR447.7m) deal to buy hedge fund administrator Goldman Sachs Administration Services (GSAS) from investment bank Goldman Sachs Group Inc (NYSE:GS).
Short hedges are also called bear hedges or sell hedges and long hedges are called bull hedges or buy hedges. The most generally used terms in the industry, however, are short and long.