some definitions

James Devine jdevine at
Tue Sep 29 17:45:13 PDT 1998

At 04:07 PM 9/29/98 -0700, you wrote:
>>farmer sometimes "hedges" by signing a contract with someone to pay a
>>price for some of his product in the future. This "locks in" the price,
>>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?

yeah, it's "only a tiny portion" -- but that's still _some_. It's easier to explain hedging with agricultural examples. Besides, it you listen to the radio in rural areas, they'll fill your ears with hog belly futures data.

>>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...

the White Sox? ;-) Jim Devine jdevine at &

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