1st Example of Long Hedge
lApril
15, 2001
–Buy
5 January, 2002 NYMEX natural gas contracts @ $4.00/MMBtu
lDecember
15, 2001
–Sell
5 January, 2002 NYMEX natural gas contracts @ $8.00/MMBtu
–Buy 50,000 MMBtu of natural gas for $8.00/MMBtu