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long hedge

Definition

Transaction that secures an advantage or protection against a possible increase in the price of a traded item (commodity, financial instrument, security, etc.) that will be bought or sold in the future. For a buyer or consumer, it provides at least a partial protection by securing future supply at a fixed ceiling price. For a seller it locks in an advantageous floor price. Also called buy hedge, buying hedge, or purchasing hedge. See also short hedge.

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