I recently had a prospective client ask, D o yo ur clients with hedge accounts make money
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Question:
I recently had a prospective client ask, "D o yo ur clients with hedge accounts make money trading futures and options most years?" The truth is no, they don't because the purpose of a hedge is to shift the risk of price change to somebody else. If a farmer buys puts in his hedge account every year to lock in a floor price, he wants to lose money every year in the hedge account."
Why would you rather lose money with your hedge account (i.e. lose money with your puts)? What is the "problem" when you are making money with your hedge account (i.e. making money with your puts)?
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Auditing Cases An Interactive Learning Approach
ISBN: 978-0132423502
4th Edition
Authors: Steven M Glover, Douglas F Prawitt
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