
Hedging Strategies Using Futures 119
C H A P T E R S U M M A R Y
e major participants in a futures market are hedgers.
A perfect hedge is achieved when the price risk is completely
eliminated and the hedger is able to lock in a known price for the
exchange of an asset at a future time. A long hedge is undertaken
when a person needs to buy the underlying asset in the future.
A long hedge involves buying the futures at the current time.
For a long hedger, the concern is that the price of the underly-
ing asset may increase in the future, thereby requiring them to
pay a higher price when they need to buy the asset