shares and stock
This query is : Resolved
03 September 2009
can anybody tell me the difference between speculator , arbitrageur , hedging.
03 September 2009
difference between hedging and speculation.
Hedging >>>>>>>
Used to reduce risk and manage margins
Reduces the fluctuations in propane prices for retailers and end users
Used to "back to back" sales to residential/commercial customers at a fixed profit margin
An important part of managing and growing your retail propane company
Speculation >>>>>>>
"Betting" the market will move in one direction
Retailers buy product on a fixed price but charge market-based prices to their consumers
Speculation increases risk and creates uncertainty on retail margins
Can literally put you out of business
Arbitrage >>>>>>>>>
Arbitrage is the practice of taking advantage of a price differential between two or more markets.
Hedging >>>>>>>
Used to reduce risk and manage margins
Reduces the fluctuations in propane prices for retailers and end users
Used to "back to back" sales to residential/commercial customers at a fixed profit margin
An important part of managing and growing your retail propane company
Speculation >>>>>>>
"Betting" the market will move in one direction
Retailers buy product on a fixed price but charge market-based prices to their consumers
Speculation increases risk and creates uncertainty on retail margins
Can literally put you out of business
Arbitrage >>>>>>>>>
Arbitrage is the practice of taking advantage of a price differential between two or more markets.
Manmohan ACA, CS
(Expert)
03 September 2009
excellent answer by Prakash
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