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
A hedger who is short the cash (needs the cash commodity) buys a futures contract to hedge his future needs. By buying a futures contract when he is short the cash, he is entering a long hedge. A long hedge is also known as a substitute purchase or an anticipatory hedge.
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