long hedge

(redirected from Long Hedges)

Long hedge

The purchase of a futures contract in anticipation of actual purchases in the cash market. Used by processors or exporters as protection against an advance in the cash price. Related: hedge, short hedge
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

long hedge

The purchase of a futures contract or call option to protect a short position against possible increases in the prices of commodities, currencies, indexes, or securities. For example, an investor might purchase a futures contract on fixed-income securities to protect against a decline in interest rates. Also called buying hedge.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in classic literature ?
Lucy hurried out of the room, but Maggie did not take the opportunity of opening her book; she let it fall on her knees, while her eyes wandered to the window, where she could see the sunshine falling on the rich clumps of spring flowers and on the long hedge of laurels, and beyond, the silvery breadth of the dear old Floss, that at this distance seemed to be sleeping in a morning holiday.
OUR countryside is alight with bluebells and spring flowers, and in many places overhead there hangs a glowing shower of golden-rain laburnum, often long hedges of them.
"These large and increasing stocks will not only up the likelihood of additional commercial short hedges, but will also encourage the commercials to defer long hedges," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.
"There are two basic types of hedges: long hedges, in which futures contracts are bought in anticipation of (or to guard against) price increases and short hedges, where a firm or individual sells futures contracts to guard against price declines" (Brigham, Gapenski, & Ehrhardt, 1999, p.
"There are two basic types of hedges: (1) long hedges, in which futures contracts are bought in anticipation of (or to guard against) price increases, and (2) short hedges, where a firm or individual sells futures contracts to guard against price declines" (Brigham, Gapenski, & Ehrhardt, 1999, p.
The other type of hedge is an initial buy position in the futures market called a long hedge. Long hedges are used to protect against increasing values in the cash market.
Short hedges are also called bear hedges or sell hedges and long hedges are called bull hedges or buy hedges.
Table 5-4 shows how they could long hedge that risk.
Large amounts of cuttings ( from long hedges or tall conifers ( can be gathered in an optional extra volume bag attached by a tube to the Groom.
Coventry City Council - blessed with suburban areas of tree-lined roads, grass verges and long hedges - should warn the responsible ground agencies to be more punctual with routine hedge trimming and annual removal of barrel growth from trees, to allow citizens and visitors to enjoy well groomed environmental areas for a change.