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clock Created with Sketch. 11/04/25
11:09
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Originally posted by Zyzac
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I would ask that people stop referring to the hedge as "underwater to the tune of $xxxx". This is misleading and is implying it is some sort of liability that needs to be paid off.opportunity cost only. An actual liability would emerge only if BGL were unable to deliver sufficient ounces to meet the forward (hedged) commitments. If BGL is unable to meet its hedged commitments, it will need to buy the requisite number of gold ounces at spot prices and deliver. This means either running down their cash reserves further, taking on a loan, or raising capital from the markets.
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Its still a Debt either way as it has to be paid one way or another.
(20min delay)