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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: marginmike who wrote (126219)9/28/2001 3:46:12 PM
From: pater tenebrarum  Read Replies (5) of 436258
 
much less than they used to be, since HM only had a minuscule hedge, and ABX apparently didn't increase it.
also, ABX's hedge has a relatively high cut-off, depending on the prevailing lease rate. they're only going to have to worry at significantly higher prices. according to them, it's a free lunch, but i don't believe that. i.e., they say they'll be able to defer delivery obligations in the event of a big rally. must have very understanding counterparties in that case...and understanding counterparties in the derivatives biz are a non-existent species imho.
it's an issue we'll need to revisit at say PoG 350 - 400...we'll see what they have to say THEN.

have a great weekend all, i'm calling it a day...
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