Wondering when to hedge, or how to do it successfully? While each situation is different, the following tips may provide some guidance around when to hedge, and how to get the best results when you do.
1. Decide whether you’re hedging to lock in a good profit for your crop or to make a buck in futures. If you’re doing it because it makes sense for your farming business, it’s probably a good decision. If you’re doing it just to make some money trading futures, you’re embarking on what could be a slippery slope of painful speculative losses.
In my last post, I mentioned that I often share book recommendations with customers and other people I meet – and as part of my series of suggestions, here’s another to consider adding to your reading list.
It’s The Black Swan, by Nassim Nicholas Taleb. This one is harder going than my previous suggestions, but if you’ll take your time with it, gleaning bits and pieces of wisdom, you’ll find lots.
I frequently share book recommendations as part of my conversations with customers, and sometimes I hear back from them on how certain books have made an impact on them.
The “recommended reads” posts will be part of a series in which share some of my favourites with a few comments on why I think they’re valuable and how they’ve shaped my view of the markets and agribusiness.
I first started studying commodity markets when I was 24 years old. One reason I’ve stayed involved with them – and stayed keenly interested in them – is that I’m always learning something new. Something new about the world, about human nature, about myself. Something new about my business, the process of the job, the clients we serve.
Here are some of things I’ve learned as a perpetual student of the markets.
What, another blog? Yeah – we get it. These days it seems everyone has an opinion, and there’s no shortage of places to share them. This is the day of the digital soapbox; our inboxes and our mailboxes (not to mention Twitter and other social media accounts) are filled with voices that want our attention.
Despite an explosion in media services that provide everything from the latest local weather forecast to crop conditions around the world, many people in the farming industry find it increasingly difficult to get the information they truly need.