Library

Hedge-to-Arrive Contracts

Summary

Hedge-to-arrive (HTA) contracts came into use in the western Corn Belt in the early 1990s, but have been used much longer in the eastern Midwest. There are four main types of futures-based HTAs, ranging from a relatively simple two-decision version to much more complex types that require several decisions after the contract is initiated. Potential market and non-market risk exposure increases dramatically with the more complex HTAs, particularly where rolling futures positions between crop years is permitted.