Effective hedging for producers
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
CPM Group's Jeffrey Christian discusses why producers should hedge their production. He goes through some experiences in which hedges did very well, and some cases in which hedges went bad. He discusses poorly structured and managed hedging programs and well constructed and highly successful hedging programs at other companies, revealing and reviewing producer histories not broadly known in the market. He discusses some of the reasons for poorly performing hedging, and reviews the origins and history of the anti-hedging witch hunt by investors. He also talks about how CPM Group offers better options programs that protect from falling prices while allowing producers to benefit from upward price movements.