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Cross hedge

• Hedging a risk in a cash market security by buying or selling a futures contract for a similar but not identical instrument.

• Is the use of a futures or other derivative contract as a risk management tool where the specifications of the underlying and the derivative do not match. However, thereshould be a reasonable economic rationale for doing this action.

 
 Embedded terms in definition
 Cash market
Cash
Contract
Derivative
Futures contract
Futures
Hedging
Market
Risk management
Risk
Security
Underlying
 
 Related Terms
 

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