Buying Hedge

Buying futures to hedge against the sale of a cash commodity. An investor might use a buying hedge if he/she expects to buy a certain amount of the commodity in the future, but is worried about price fluctuations. He/she will buy a futures contract in order to be able to buy the commodity at a fixed price later.

This Glossary is provided by www.InvestorWords.com
Copyright©1997-2007 by WebFinance Inc. All Rights Reserved.