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Long Hedge

A hedge that involves taking a long position in futures contracts so as to lock in a price. When a...

Hedge Ratio

The ratio of the value of long or short futures contracts to the value of the cash commodity being hedged....

Rolling Hedge

A hedging technique (also a type of leapfrogging) which is used to provide cover for a series of exposures such...

Static Hedge

A hedge that requires no changes to its components once it is initiated. That is, the hedge will not need...

Rolling-Stack Hedge

A hedging technique (also a type of leapfrogging) which is used to provide cover for a series of exposures such...

Natural Hedge

A hedge that involves offsetting an exposure to a risk factor, wholly or partially, by an opposite exposure to that...

Short Hedge

An investment strategy designed to mitigate an existent risk. In this type of hedging, a security is usually short to...

Zero-Cost Hedge

An option trading which is arranged such that the premium received from an option sold (short option) compensates for the...

Buying Hedge

A hedging transaction which involves buying futures contracts (long futures) to protect an investor against possible increases in the price...

Reverse Option Hedge

A hedged position in which the investor purchases more than one call option for each unit of the underlying he...