hedge ratio

Definition of "hedge ratio"
  1. A measure comparing the worth of futures contracts bought or sold to the cash commodity's worth that is being secured, needed to reduce basis risk
How to use "hedge ratio" in a sentence
  1. In order to minimize potential losses, the company calculated the hedge ratio.
  2. After assessing their commodities, they determined the hedge ratio to manage basis risk.
  3. The commodities trader set the hedge ratio accordingly to protect the value of their assets.

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