Q: do you know what a "buying hedge" is?
Category: glossary , Asked by: Camden Z. From Dublin, Ireland
A: A transaction that commodities investors undertake to hedge against possible increases in the prices of the actuals underlying the futures contracts. Also called a long hedge, this particular strategy protects investors from increasing prices by means of purchasing futures contracts. Many companies will attempt to use a long hedge strategy in order to reduce the uncertainty associated with future prices. Visit Saxo Bank