RE:RE:RE:RE:RE:RE:Keep smiling, keep shiningI know we're bored but...
Hedging is related to removing some of the risk characteristics of an investment. eg Long a stock and short the industry, the currency, another stock in same industry etc... .or using options to change the risk reward profile. It changes risk profile, the goal is not to remove all risk and reward. That would be called not having a position.
Hedging is not buying 1 million shares long and 1 million shares of the exact same thing short. That's known as a waste of time. Or a career limiting move.
JPM has not staked the future of the entire firm on the test results of Inali. That does not surprise me. I dont see it as a negative.
They have many different parts of their massive business. One is specialized funds. The fact that 2 of them have noticed VLE, analyzed it, and bought some is a positive. They also cannot risk a large % of their fund on the results of one driling program. This is also called a career limiting move. But if results are good they already have done their home work and can justify to their bosses buying more. Same for BG who like the odds at 5.70.
The fund purchase is only important to the fund, not to JPM, and only important to the relative size of the fund. I would not expect they would not go over 1% or much less on an unproven speculation.
I have never met the CEO of JPM, but i'd guess he was not involved in the approval of the VLE purchase, and it did not go to the BOD for their approval.... this is not a reflection of JPM policy. :)