Skip to main content
Options and Futures

Cross-Hedging

When seeking to hedge a cash commodity without a corresponding futures contract, one can turn to a related futures contract that follows similar price trends. This strategy, known as cross-hedging, involves using a different but related futures contract, such as soybean meal futures to hedge fish meal. By doing so, one can mitigate the risk associated with price fluctuations in the cash commodity market. This is a common practice in the world of finance, and an important concept to understand when managing investments.

Related terms

Open Interest

Understand the meaning and definition of Open Interest in the context of stock market, trading, and investments.

MORE
Federal Funds

Understand the meaning and definition of Federal Funds in the context of stock market, trading, and investments.

MORE
Crop Reports

Understand the meaning and definition of Crop Reports in the context of stock market, trading, and investments.

MORE
Floor Trader

Understand the meaning and definition of Floor Trader in the context of stock market, trading, and investments.

MORE

Open Free Demat Account!

Join our 3.8 Cr+ happy customers

+91
Explore other categories
Enjoy Zero Brokerage on Equity Delivery
10 Cr+DOWNLOADS

Enjoy Zero Brokerage On Stock Investments

Get the link to download the App

Scan this QR code to download the app
Get it on Google PlayDownload on the App Store