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In commodities and certain derivative markets, hedgers need to be matched with speculators. Hedgers are offsetting risk to speculators. Thus a farmer can insula
by JackFr 1y ago
In commodities and certain derivative markets, hedgers need to be matched with speculators. Hedgers are offsetting risk to speculators. Thus a farmer can insulate themselves against a drop in the price of corn and an airline can insulate themselves against a jet fuel hike. To do that someone has to take that risk. It might by to satisfy their risk appetite which will be tied to returns.
- mattnewton 1y agoI think I understand that. I don’t see how it self evidently is good for hypothetical burrito sellers to financialize their industry follows from that. There are a lot of differences between agricultural crops and take out, and financialization has costs. Being able to bet on something isn’t inherently good, but the article seems to treat that as axiomatically true without offering an explanation about the problem financialization is solving in the BNPL burrito delivery space, like you have for airlines and farmers.