<<While I didn't hear THAT phrase, I do disagree with your conclusion, i.e., that "most of the hedging in business today is naked hedging.">>
Sorry, Not my conclusion, just reporting what he said while I don't agree or know, this was the claim of Enron's Skilling.
<<And a follow-up question: have you been a supplier or in charge of a demand physical commodity, and needed or qualified for a commodity account? >>
On the buying side for a corporation. Most of our price hedging was mostly fuel natural gas & plastic(driven by oil price), and done with short - intermediate contracts placed at projected price lows for never more than planned projected demand. Sure, in the end,some contracts were in excess of our demand & had to be sold into the market, but at times demand was greater than planned supply.
"Speculation", profit / loss from speculation was never intended, & the planner/ buyer would get called down nearly as hard for a speculation profit as loss.
I had it explained to me(loudly) that our business involved the consumption of these items not gambling. |
