RMS Chart, page-1334

actually you do both. Hedging is purely risk management and you do it to varying degrees because you don't know for sure which way prices might go. It all comes down to the industry, shareholder expectations, company risk appetite and how the business is financed. Even when markets are bullish and you're confident they're going higher, good governance will deem you hedge into it. I manage the Front Office for a large energy company and trade lots of power and gas (among other things) and despite spending most of my days cursing Middle Office hedging is an essential part of my volatile world (weather is difficult to predict). However, the issue isn't so much hedging it's choosing the appropriate instruments and structures given a particular view or outlook. i.e if the market is looking bullish don't hedge your entire position with something that limits all your upside. I think RMS are more guilty of this mistake than anything else.