Rolling hedge? | Forex Trading and Money Exchange

Rolling hedge?
Posted 20 September, 2009 by Melvin X. Hoffman from Jevpatorija
i came into something that i didn't comprehend: what does rolling hedge mean?
Currency Master Answers:
That is an important subject to comprehend, Melvin. Rolling hedge is A strategy for reducing risk that involves using the high levels of liquidity typically present with exchange-traded futures and options in order to achieve a continual risk-offsetting position. A rolling hedge is done by closing out existing positions as they near maturity and then concurrently opening new positions with maturity dates further in the future. One of the main benefits of rolling a hedge is that by extending the time until maturity further into the future, there is less chance of large price movements in the contract in the short term, because the maturity date is still distant. This reduces the risk of incurring margin calls on the position.
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