The futures market can be used to guard against interest rate and input price risk through the use of hedging. If the firm were concerned that interest rates will rise, it would use a short hedge, or sell financial futures contracts. If interest rates do rise, losses on the issue due to the higher interest rates would be offset by gains realized from repurchase of the futures at maturity--because of the increase in interest rates, the value of the futures would be less than at the time of issue. If the firm were concerned that the price of an input will rise, it would use a long hedge, or buy commodity futures. At the future's maturity date, the firm will be able to purchase the input at the original contract price, even if market prices have risen in the interim.