3 ms·

Probably hubris. If you are forecasting such a big expense then yeah, you should probably hedge the upside risk with futures contracts.

• renewiltord 4y ago
  Perhaps there's no mechanism for a government project to do this without being exposed to becoming a speculative endeavour.
  • qeternity 4y ago
    It's called a forward (which is basically any vanilla contract for delivery). They shouldn't be trading financial instruments, but they should contract with a supplier for the tonnage needed, and that supplier then turns around and manages their risk, possibly with futures. This is all smoke though. The project would be way over budget, and input costs are being blamed.
    • renewiltord 4y ago
      Haha, lines up with my intuition about government. Thanks for that piece of terminology and explanation.