DEFINITION of 'Selling Hedge'
A hedging strategy with which the sale of futures contracts are meant to offset a long underlying commodity position.
Also known as a "short hedge."
BREAKING DOWN 'Selling Hedge'
This type of hedging strategy is typically used for the purpose of insuring against a possible decrease in commodity prices. By selling a futures contract an investor can guarantee the sale price for a specific commodity and eliminate the uncertainty associated with such goods.