Bona Fide Hedging Transactions

What is Bona Fide Hedging Transactions?

Bona Fide Hedging Transactions meaning Transactions on a designated contract market or swap execution facility that serve as a substitute for transactions in physical marketing channel and reduce actual risks that a business would otherwise face (without the bona fide hedging transaction) related to the change in value of assets, liabilities, and services.

 

reference: U.S. COMMODITY FUTURES TRADING COMMISSION – CFTC Glossary