Suppose you are a natural gas seller, selling physical natural gas in the spot market to a pipeline in Henry Hub (which is the same location as the delivery of the natural gas futures contracts). You hedge by locking in $3.50 per MMBtu with a futures contract. How will the hedge work, if by maturity day spot price of natural gas is S_T?

		The pipeline will pay you $3.50 per MMBtu
		The pipeline will pay you St, and the futures exchange will pay you (3.50 - Ft), so hedge is not guaranteed to work
		The pipeline will pay you ST, and the futures exchange will pay you (3.50 - ST) due to convergence property, so hedge is guaranteed to work