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To: Follies who wrote (38262)	8/3/1999 6:27:00 PM
From: Enigma	Respond to of 116979

It looks like a hedge, tastes like one and smells like one. A hedger is a person who ultimately owns a commodity i.e a crop in the ground, reserves in the ground, etc. A speculator does not own the underlying commodity - he simple deals in the futures contract. He can then 'hedge his position' to offset his risk - but this discussion deals with the role of producers as hedgers.

To: Follies who wrote (38262)	8/4/1999 2:49:00 AM
From: Zardoz	Read Replies (2) \| Respond to of 116979

Yes, there is a difference between a future, forward, and commodity swap. But put simply, DoubleD example, which he calls keeping it simple, is not a forward or future BECAUSE he assumed that you can't, or will not buy back your position. That's why he created this artifical loss. He set the conditions up, and showed a stupid example. Then he called it a hedge... He says it lowered risk... Yeah sure did, one way only. And you guys all call me biased. I thought DoubleD worked for ABX at one time, and brokerage??? Yet he's seeing how far away he can lead you from the truth. Here's a link that you can read: e-analytics.com Hedge A conservative strategy used to limit investment loss by effecting a transaction which offsets an existing position. Hutch