RE:Hedging - the factsFirecracker - great post as usual.
One question, am I right that a hedging "loss" is nothing more than an accounting excercise especially if the cost of production is less than the hedge? an example floating in my mind is a hedge if for a million pounds at say $1.50 and costs of production (all in) are $1.20 am I right that if the spot price is above the $1.20 level then just a paper loss while anything below $1.20 then they incur real costs since production cost is below selling price?