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Options and Futures

Hedger

As a knowledgeable professor in finance, it is important to understand the concept of hedging. This refers to an individual or company who owns or plans to own a cash commodity, such as corn, soybeans, wheat, or U.S. Treasury bonds, and is concerned about potential changes in its cost before buying or selling it in the cash market. In order to protect against price fluctuations, a hedger will purchase or sell futures contracts for the same or similar commodity. These positions are later offset by selling or purchasing futures contracts of the same quantity and type as the initial transaction. This allows for a sense of security in the volatile market of cash commodities.

Related terms

Underlying Futures Contract

Understand the meaning and definition of Underlying Futures Contract in the context of stock market, trading, and investments.

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Expanded Traded Hours

Understand the meaning and definition of Expanded Traded Hours in the context of stock market, trading, and investments.

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Position Day

Understand the meaning and definition of Position Day in the context of stock market, trading, and investments.

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Class Of Options

Understand the meaning and definition of Class Of Options in the context of stock market, trading, and investments.

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Registered Representative

Understand the meaning and definition of Registered Representative in the context of stock market, trading, and investments.

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