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To: TheBusDriver who wrote (27625)12/12/2006 4:01:47 AM
From: loantech  Read Replies (1) | Respond to of 78422
 
hedge.



To: TheBusDriver who wrote (27625)12/12/2006 8:26:38 AM
From: Metacomet  Read Replies (1) | Respond to of 78422
 
The practice of producers to contract to deliver future production at a pre-agreed price is hedging.

Depending on where the commodity price moves to by the time of delivery, this may be turn out to be good or bad move.

Of course it can also be a necessary strategy to raise cash in support of production costs in some cases.