What is LONG HEDGE?

An advantage or protection is secured by this type of transaction against a possible price increase of a traded item, like a commodity, financial instrument, security, and the like. These will be bought or sold in the future. It intends to provide some partial protection for buyers and consumers by securing at a fixed ceiling price a specific future supply. It intends to lock in an advantageous floor price for the seller. Also known as buy hedge, buying hedge, or purchasing hedge. Also refer to short hedge.

More On This Topic



Link to This Definition
Did you find this definition of LONG HEDGE helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary