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 order to reduce the risk the issuer is forced to buy hedge, whose price usually neutralizes the advantage of lower nominal interest rates.
4m) deal to buy hedge fund administrator Goldman Sachs Administration Services (GSAS) from investment bank Goldman Sachs Group Inc (NYSE:GS).
Legg Mason would also buy hedge fund firm The Permal Group, one of the five largest funds-of-hedge-funds managers in the world, for an initial payment of $800 million.
Short hedges are also called bear hedges or sell hedges and long hedges are called bull hedges or buy hedges.