Short Hedges: Example If the oil price proves to be $17.50 on August 15 (spot price) ExXon receives $17. 50 under the sale contract ExXon receives $1.25 from the futures contract If the oil price proves to be $19.50 on August 15 (spot price) ExXon receives $19.50 under the sale contract Exxon loses $o.75 (19. 50-18.75) from the futures contract Charles cao7 Charles Cao Short Hedges: Example ◼ If the oil price proves to be $17.50 on August 15 (spot price) ◼ Exxon receives $17.50 under the sale contract ◼ Exxon receives $1.25 from the futures contract ◼ If the oil price proves to be $19.50 on August 15 (spot price) ◼ Exxon receives $19.50 under the sale contract ◼ Exxon loses $0.75 (19.50-18.75) from the futures contract