Speculation and Hedging: 262-67 (Classic Reprint) - Couverture souple

Paul H. Cootner

9781333758820: Speculation and Hedging: 262-67 (Classic Reprint)

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ISBN 10 : 1333758820 ISBN 13 : 9781333758820

Editeur : Forgotten Books, 2017

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Excerpt from Speculation and Hedging: 262-67

Hedging is usually defined by illustration. In the standard example, a buyer of (say) 5000 bushels of wheat at $2 bushel, fearful of the risk of price decline, simultaneously sells a futures contract representing 5000 bushels of wheat at $2. If the price subsequently drops to a bushel, the capital position of the buyer will be unaffected because the futures prices will also decline and the profit on his short sale of futures will exactly offset the loss on the inventory holdings. The exactness of the offset is guaranteed by the possibility of making delivery against the futures contract. Thus, by hedging, the holder of wheat eliminates the risk of price fluctuation.

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�diteur: Forgotten Books
Date d'�dition: 2017
Langue: anglais
ISBN 10: 1333758820
ISBN 13: 9781333758820
Reliure: Broch�
Nombre de pages: 159
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Speculation and Hedging (Classic Reprint)

Paul H. Cootner

Edit� par Forgotten Books, 2017

ISBN 10 : 1333758820 ISBN 13 : 9781333758820

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Vendeur : Forgotten Books, London, Royaume-Uni

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Paperback. Etat : New. Print on Demand. This book delves into the complex world of futures markets, challenging traditional understandings of speculation and hedging. The author argues that hedging, often seen as a risk-eliminating strategy, actually involves a nuanced interplay of risk and reward. By drawing parallels with well-known financial markets, the book offers a fresh perspective on the motivations and strategies of market participants. Through a detailed analysis of the "supply curve of storage," the author dissects the various costs and benefits associated with holding inventories. This framework sheds light on the crucial role of "convenience yield" and the impact of expectations on hedging decisions. The book further explores the concept of "basis risk," the inherent uncertainty arising from the different maturities of spot assets and futures contracts. This analysis reveals how hedgers navigate a spectrum of risk and reward by adjusting the maturity of their hedges, akin to the portfolio management practices of financial institutions. Ultimately, this book offers a compelling argument: hedging is not simply a defensive maneuver but a dynamic form of speculation. By understanding the true nature of hedging, market participants can make more informed decisions and navigate the complexities of futures markets with greater confidence. This book is a reproduction of an important historical work, digitally reconstructed using state-of-the-art technology to preserve the original format. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in the book. print-on-demand item. N� de r�f. du vendeur 9781333758820_0

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