cross hedge

cross hedge definition - finance
Offsetting a risk in a cash market security or commodity by buying or selling a futures contract for a similar investment. A cross hedge is done when there is a high degree of correlation between the two investments but an exact futures contract doesnÂ’t exist.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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