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Politics : Formerly About Advanced Micro Devices

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To: Road Walker who wrote (405920)	8/12/2008 2:20:39 PM
From: i-node	Read Replies (1) of 1576221

A hedge IS a speculation. No, it isn't. "Speculation" as it has been used by you on the Left in this context means gambling on future price increases in order to make a profit. A hedge is a totally different transaction, one which is designed to protect a company from future price increases in the underlying and therefore to mitigate future expense by paying a premium today. As to the "other side" of the transaction, when an oil futures contract is opened, there is someone hedging against increases on one side of the transaction and hedging against decreases on the other. Duh. I understand your confusion, but while the form of a speculation may be the same as that for a hedge, the substance of the transaction is radically different. And the substance is what matters. To drive home the point a bit further, since you seem horribly confused, do you ACTUALLY believe the liberals in Congress who were complaining about "speculators" were referring to SW Airlines buying jet fuel futures? That is a "yes" or "no".

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