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| Statistically, you can calculate (a bit complicated) a method; however, I caution anyone using the natural gas market as there are some very big players which can occasionally get involved & the capital requirement to maintain a hedge could be huge, frightening and I compare it to R. Roulette with 6 shells in a 6 cylinder weapon....another alternative & not time yet is to begin to study the carrying charge spreads in the distant options & calculate a strategy to try to pick up some gain & that may not be possible...but at least worth looking at; throughout my lifetime I have calculated strategies for about every product for some major companies & it is pretty easy to step into a complex hedge & quadruple the risk. I have been there. While we are all very pleased to have these many futures and options available to attempt to control risk...there exists what I have always called 'the helping hand' involving commissions and fees & interest which can eat you alive. | |
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Hedging fertilizer costs?
