we dont disagree on the basics
and the cost of hedging should be a builit in , never ignored, always done part of any business where the prime business model of the business does not involve profiting on the raw material or the profit on the raw material is fixed - BUT - it just dont happen like that in the real world
the fact is that hedging is an expense - thats why airlines dont hedge all their fuel costs, and why some hedge more than others, even the different spreadbetting companies will hedge to different levels
in the ideal - a company can charge enough to cover the cost of hedging - but either through greed or need, the hedge does not always get placed
hence my view of hedging as a gamble, wether the hedger is seeking protecion or exposure to risk
and the cost of hedging should be a builit in , never ignored, always done part of any business where the prime business model of the business does not involve profiting on the raw material or the profit on the raw material is fixed - BUT - it just dont happen like that in the real world
the fact is that hedging is an expense - thats why airlines dont hedge all their fuel costs, and why some hedge more than others, even the different spreadbetting companies will hedge to different levels
in the ideal - a company can charge enough to cover the cost of hedging - but either through greed or need, the hedge does not always get placed
hence my view of hedging as a gamble, wether the hedger is seeking protecion or exposure to risk
FetteredChinos
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tonyjai said:
thanks!
glad you noticed.
