Long hedge

The purchase of a futures contract( s) 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

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   The purchase of a futures or option position to protect against a price rise in the corresponding cash market. Increased costs from the need to buy a cash commodity which has risen in price will be offset by the profits from a future or option which has also risen in price. The opposite to short hedge.
   ► See also Hedging.

Financial and business terms. 2012.

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