Contract used in futures trading where the futures price is determined when the contract is created, but the basis level is not determined until later, usually just before delivery. A hedge to arrive contract is typically used for commodities such as grain. A seller may choose to use this type of contract when he or she believes that future prices are high and are about to drop, because this locks in the future price and only leaves the basis price to be determined in the future.
Related information about hedge to arrive contract:
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Hedge-to-Arrive Contract– In this cash contract the seller is allowed to lock in the futures price, removing the risk of a price decline, yet not risking margin calls if ...
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HEDGE-TO-ARRIVE Contract The HTA contract is one that offers the seller of grain the ability to lock in the futures market portion on a cash grain contract.
- Hedge to Arrive Contract Law & Legal Definition
Hedge to arrive contract is a contract used in futures trading where the futures price is determined when the contract is created, but the basis level is not ...