some definitions

James Baird jlbaird3 at hotmail.com
Tue Sep 29 16:07:51 PDT 1998


A
>farmer sometimes "hedges" by signing a contract with someone to pay a
fixed
>price for some of his product in the future. This "locks in" the price,
so
>that the farmer doesn't suffer in a big way from price declines.

I seem to remember reading in Wall Street about how this "fairy tale" explanation (hardworking farmers transfer risk to speculators and everyone lives happily ever after) is just that: only a tiny portion of futures contracts have anything to do with producers or consumers of actual commodities. Doug, if you could elaoborate?


>
>btw, how 'bout those Cubs?!? I expect to see pigs flying soon.
>

Bastards. I already had my tickets on order for the playoffs in Candlestick. And, speaking as a born-and-bred New Englander, the pigs will start flying when the Sox win the Series. The Cubs just suck - they don't have the awesome tragic power of those afflicted with the Curse of the Bambino...

Jim Baird

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