Futures Hedging Example

當時差點說三道四

mnn

Hi, may I ask why are we comparing the price we buy the futures at vs the price it closed at? That seems to be for speculation purposes rather than hedging.. please correct me if I am wrong ...

i.e. is hedging with futures about the hedging of the current spot vs futures price OR spot movement vs future price movement?

How is the margin amount determined ? thank you

thank you so much

Excelent!

Marvelous. This and many of your videos are invaluable and deserve repeated watching. I just can’t thank you enough. I’m sure I speak for many viewers.

This assumes that hedges don't go short.

Thanks for such informative clip!

so you're a delivery company and when gas price goes up, your expenses goes up but profit goes down. can anybody give me a simple calculation how it work?

The problem with story problems is its not usually your story.. however if you file bankruptcy twice house burns twice.. what would you do to try to refinance if your nail tecks husband with 3 kids offers to help during his grieving when you have all that plus a surprise grandchild in the way.. you would play let's make a dealership..
I could be wrong long or short story problem...
Fast track futures are lead or unleaded by supply and I demand... unless you get cardi offset and Nikki Manged.. being a former 1099 understanding this is cryptocurrency ish.

Wow, this was a very informative video! Explained in a very understandable manner. Thank you very much!

Thank you so much Kevin. Brilliant explanation.

When you mention Distribution you are talking about Carrying Costs, right? I thought that Transportation was not a carrying cost, as Quantity, Quality, TIme , and Location (Where you will be picking it up from) are predetermined for Commodity Forwards that go to completion. At least thats what Kaplan is teaching. 😅

Thank you very much for this video Kevin! It must have been hard work making this video. This video helped me understand what fuel hedging is, and what "long" and "short" means in this context.

After watching other videos about futures (derivatives). This one is so easy to understand. Thank you

Really well explained!

Cjffucu😚😚😚😚

very well explained!!!. thanks so much!

Thank you for the content Kevin! Appreciate what ur doing

not a great explanation

Thank you so much sir....🙏🙏😊

wow huge THANK YOU. I've been going over my head with this topic, watched numerous videos but still always ended up getting confused with how buy what and how much. This video helped a lot.

Thank you very much Kevin!

Great summary

Fantastic video !!! Thank you for explaining it so well.

Though the gain over the gas value was 17k odd, he paid 68k as IM at the beginning, so what about that? Is that like a deposit which he ll get back after the contacts closure or that's gone ??

Very clear video! One thing: You forgot to mention about the leftover 6000 gallons that would have reduced the loss on the hedge

Perfectly explained!

Best🔥

They should teach us this stuff in school.

I think this is not hedging the risk, in the detail I write below, what I understand is that the contract was based on speculation. and that why if there is a change in the price agreed and the change in the closing price, high or low, would generate a profit or loss.

Could u please explain. the part of futures contract. when we. initially paid $2.8974 for a contract and it closed a $2.6813 and that's a $0.2161 difference. but as I understand we paid a lower price for the futures contract and if the price rises we should be secure as we already agreed to pay a lower price which is fixed and as for the change in closing price. why should we be bothered about that?? confused here.

Absolutely the best best best video. This is what you call explaining, I've been watching so many videos and they are too complicated to really understand, what the mechanism is. Super.

Hey Kevin, I fully understand the hedge and that it was a good one because it mostly reduces the risk(risk isn’t defined as the possibility of having losses it is defined through out uncertainty so risk can be a loss or a profit) but when you compare it to a forward hedge, do you take into account the cost or expenses for the initial margin and would then a forward hedge with a bank be less expensive for the company ? I am really not sure how to evaluate the initial margin in terms of how efficient a hedge is and how to treat that cost.
I hope you will reply soon and thanks in advance! :)

Thank you for this video! Tremendously helpful!!!!!! <3

In question no 4 they were asking about discrepancy s but you were explained benefits ...And I didn't get the concept of backward jaatiyon I think the answer is not reasonable....My answer is it is because of inflation or economical conditions

what a great presentation. you made it so easy to understand

Yes ,Nice

It's easy to understand thanks for that ,could you make another video on hedge fund to us

nice video ..... pls make one for Hedge Ratio too. thanks

Really good!!! Risk eliminated, some profit made anyway

very clear, great video, thanks a lot!

Thank you!!!!

Hi Kevin, thanks for the nie video.
Question: from the moment that you saw that the market in backwardation, why do you want to hedge against an increase in the gas price?

Why are you using 90,000 instead of the contracts u bought wich was around 84000? Thanks in advance

thank you

i dont get how that was a good hedge, you lost $113k on the futures....

nicely explained !! Thank you