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Understanding Risk in Hedge-to-Arrive Contracts

Steven Johnson, Robert Wisner and, Ed Kordick (May, 2020)

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.