OTCPK:AETLF - Post by User
Comment by
ufoolmeon Feb 12, 2015 12:51pm
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Post# 23422659
RE:RE:RE:RE:RE:Now lets talk hedges
RE:RE:RE:RE:RE:Now lets talk hedgesWell I'm supposed to be gone but being as you asked...
When you hedge, you are guaranteeing the hedge price, less hedge cost of course. They offset only to the extent of equalizing to the hedge price. If oil sells above the hedge, you are on the wrong side. You are losing everything above the hedge price, and would be better off unhedged.
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if it sells below, you make the difference between actual and hedge on the hedge, so are on the right side. So generally, you want to hedge when prices are falling.
i understand why they cashed them out. They thought the drop in oil would be a short term affair. By nearly all estimates, they were wrong - again.