short hedge

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Short hedge

The sale of futures contracts to eliminate or lessen the possible decline in value of an approximately equal amount of the actual financial instrument or physical commodity. Related: Long hedge.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Short Hedge

The sale of a futures contract or option on a security or commodity one owns in order to hedge against the risk of decline in its price. In a short hedge, the price of the futures contract or option should move inversely to the price of the underlying asset. It is also called a selling hedge.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

short hedge

An investment transaction that is intended to provide protection against a decline in the value of an asset. For example, an investor who holds shares of Nextel and expects the stock to decline may enter into a short hedge by purchasing a put option on Nextel stock. If Nextel does subsequently decline, the value of the put option should increase.
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 periodicals archive ?
"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.
It is a very structural plant and Christopher Lloyd used it at Great Dixter garden in East Sussex to make short hedges around nursery bed areas.
Short hedges are also called bear hedges or sell hedges and long hedges are called bull hedges or buy hedges.
The list begins with simple short hedges for wheat farmers and continues up in complexity to large trading giants like Cargill that use complex basis trades to move grain around the world.
An initial sell position in the futures is called a short hedge, as shown in the example in Table 5-3.
To supply these securities, investors must buy a complete set of "up" and "down" securities that, respectively, serve as long and short hedges. Since most individual investors only want downside protection for, say, home values and incomes, they can buy the complete set, keep the "down" security, and sell the "up" security, which adds to the work and expense of establishing the hedge.
It also held that treatment as an ordinary loss is available for short hedges as well as hedges relating to debt issuance.
Curve to the right between a pair of short hedges and go on along the hedge on your right as it turns left and right around the corner.