Examine an ex-post short hedging position for a future commodity sale.

a. Select a futures contract and use the expiration date on the futures as the date of your sale.

b. Use the "Chart" screen (Chart ) to create multigraphs for the prices on futures and spot (use SECF to find the spot prices on the commodity). On the Chart Menu screen, select Standard G chart; once you have loaded your futures and commodity, go to "Edit" to put your graphs in separate panels.

c. Select a beginning date that you would have implemented your hedge and a closing date near the futures expiration as the date for the commodity sale and closing your hedge. Calculate the profit or loss on the futures position from opening and closing at the futures prices at the beginning and ending dates, the revenue from selling the commodity on the closing date, and the hedged revenue (sales revenue plus futures profit). Compare your hedged revenue to the unhedged revenue. In retrospect, was the hedge a good strategy?