Joe hedged some of our cattle out in the feedlot that should be sold in October. Hedging is good if the price drops, but disappointing with the price is going up. And the cattle market is going crazy up right now. So, just for fun, Joe was wanting to get a guesstimate of what we might make in October. I wanted to figure it as our futures plus basis which is live price minus current futures. Joe wanted to figure it as live price minus current futures plus our futures. This is how arguments start. Now the question is, are these two equations equal?
p- (y-x) = p -y -(-x) = p -y + x.
YES! We were both arguing the right answer.
2 comments:
Well... you totally lost me there!
Yay algebra!
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