4 ms·
Why? Wouldn't a farmer just buy the futures contract (or an option on it), then liquidate and use the profit to offset the loss on the spot purchase? I was unde
by rfrey 4y ago
Why? Wouldn't a farmer just buy the futures contract (or an option on it), then liquidate and use the profit to offset the loss on the spot purchase? I was under the impression that hedgers never take delivery.
- vkou 4y agoHedges who sit in an office at Wall street never take delivery. If you're a person who actually needs the future, you need to take delivery. This makes sense on an industrial mega-farm scale, but doesn't make sense at the private-farm scale.