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A acquire or reduction in The cash situation because of modifications in Value levels are going to be countered by modifications in the worth of the futures position. If there is a drop in level, the reduction in The cash current market situation might be countered by a attain in futures position.
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 Let’s condition Cory’s Tequila Corporation is stressed with regards to the volatility in the price of agave, the plant used for making tequila. To safeguard (hedge) vs . the unpredictability of agave premiums, CTC may get in into a futures arrangement (or its fewer regulated cousin, the forward agreement), which permits the business enterprise to get the agave at a certain cost at a established day in the future.