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16/06/21
09:29
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Originally posted by wassa:
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Hi SS, Another term rather than hedge may be price protection. If they ship today they lock in today’s price for 80-90% of the shipment .... the remainder is paid at the price on the settlement date.... basically it gaurantees RVR todays price so their isn’t any negative adjustments if the price of zinc falls between today and settlement. There’s multiple qtrly shipments so multiple prices they will be price protected at in any qtr. ( hence 1.23 to 1.27 range ) .... these are last qtrs prices, so we are now getting 1.37 as Whiskey stated so this qtrs price protection will be in a range around this, lower or higher dependent on the shipping schedule.
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That was by far the best explanation of the way RVR does its hedging. Ive seen on hot copper. Please keep for future reference of newbies questioning how rvr does its hedging