TeachMeFinance.com - explain Hedging
Hedging The term 'Hedging ' as it applies to the area of agriculture can be defined as ' Taking a position in a futures market opposite to a position held in the cash market to minimize the risk of financial loss from an adverse price change; a purchase or sale of futures contract as a temporary substitute for a cash transaction that will occur later (i.e., long hedge and short hedge). Hedgers use the futures markets to protect their business from adverse price changes'.
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