short hedge

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 ?
Long- short hedge strategies seek to take advantage of this widening by buying the good companies (going 'long') and shorting the weaker ones.
It is managed by the same team that manages the existing Sirios US equity long/ short hedge fund and will be led by Sirios' co-founder and MD John Brennan.
The following example is a short hedge for use by an electricity producer that wishes to protect itself against a price decline in an anticipated sale.
An initial sell position in the futures is called a short hedge, as shown in the example in Table 5-3.
Our own garden is very small with just one short hedge and a scrap of lawn, yet it can still be busy with birds.
Thus, because the net hedge position is a short position in the five-year note (see the table), a fall in the value of the note due to an increase in rates will result in a gain in value of the short hedge position.
At one time I made a short hedge and clipped it regularly, using all the clippings for herb teas.
The futures alternative to the swap hedge is a little more complicated than a simple short hedge. The thrift is concerned that interest rates might rise.
sell hedge--a bear hedge or a short hedge. A hedge entered into to offset the impact of a falling price.
Walk straight ahead over the fairway to a waymark post and go on to the next waymark post and curve to the right along a short hedge and a ditch.
"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.