Economic Tidbits


“When we hedge with futures contracts (or any other type of contract), we need to remember that we are doing that to reduce our risk. Hedging is about risk management, which means that we will not be able to take advantage of higher prices in case the market goes up but we will be protected against lower prices in case the market goes down. There is no way to get around this trade-off.”

Fabio Mattos, Assistant Professor, UNL Department of Agricultural Economics, The Wild Side of Commodity Markets: Hedging in Times of High Volatility, Cornhusker Economics, May 19, 2021.

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