1st Example of Long Hedge

• April 15, 2001

  • Buy 5 January, 2002 NYMEX natural gas contracts @ $4.00/MMBtu

• December 15, 2001

  • Sell 5 January, 2002 NYMEX natural gas contracts @ $8.00/MMBtu
  • Buy 50,000 MMBtu of natural gas for $8.00/MMBtu

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