Anticipatory Hedges

What this video covers

• Why an anticipatory hedge is defined by timing, not by different mechanics, and why the futures direction stays identical to an ordinary hedge
• How to identify a short anticipatory hedger: a producer who will sell physical output later and sells futures now to lock in a selling price
• How to identify a long anticipatory hedger: a buyer, processor, or manufacturer who will purchase physical input later and buys futures now to lock in a purchase price
• Why "short" and "long" refer only to the futures leg, not to whether the hedger currently holds the physical commodity
• The co-equal nature of anticipatory hedges: they come in both short and long directions based solely on the future cash transaction
• The side-by-side ordinary versus anticipatory distinction, where only the cash-position timing changes and the futures mechanics remain identical
• Why the futures market only asks what you will ultimately do in the cash market (sell or buy), never what you own today