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<blockquote data-quote="csmfutures" data-source="post: 49372" data-attributes="member: 718"><p>Actually, bill is right. Hedging is a practical and effective business tool. IF you have the dicipline to treat your business as exactly that, a business.</p><p></p><p>I have more cattleman and farmers who "play" the market with grain in the bin or cattle in the field and complain about losing money on futures. Many farmers appear to be experts in the gold and crude oil market......... ???? </p><p></p><p>It is not hedging, it's speculating and it's perfectly fine, there's plenty to be made or lost, but only do it if your not going to complain that you lost money on your hedge.</p><p></p><p>Hedging is simple risk protection, with the main risks being cash to futures basis and cash for margin. I had customers put hedges on last fall and ride them all the way up, understanding this is a business decision. They were happy as could be when BSE came around and they were still on.</p></blockquote><p></p>
[QUOTE="csmfutures, post: 49372, member: 718"] Actually, bill is right. Hedging is a practical and effective business tool. IF you have the dicipline to treat your business as exactly that, a business. I have more cattleman and farmers who "play" the market with grain in the bin or cattle in the field and complain about losing money on futures. Many farmers appear to be experts in the gold and crude oil market......... ???? It is not hedging, it's speculating and it's perfectly fine, there's plenty to be made or lost, but only do it if your not going to complain that you lost money on your hedge. Hedging is simple risk protection, with the main risks being cash to futures basis and cash for margin. I had customers put hedges on last fall and ride them all the way up, understanding this is a business decision. They were happy as could be when BSE came around and they were still on. [/QUOTE]
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