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Can someone explain this???

Discussion in 'The Lounge' started by Stickseler, Feb 10, 2006.

  1. Stickseler

    Stickseler 3/4 ton status

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    OK I understand Lumber futures and it kind of makes sense but this just dumbfounds me :confused: :crazy: :confused:
     
  2. Can Can

    Can Can Pusher Man Staff Member Super Moderator

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    Well, my company relies on cold weather to make money, and any job I do in the winter takes at least twice as long as in the summer, so I can fully appreciate the fact that weather and temperature can serioulsly affect the bottom line.

    As far as how it works, I don't get it either. It sounds like you buy hedge contracts tied to the snowfall index ahead of time and if the weather ends up being piss poor, the index value goes up and your investment is worth more, allowing you to cash it in and theoretically cover any snow-related losses.

    Does that sound right?:dunno:
     
  3. Stickseler

    Stickseler 3/4 ton status

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    Yea thats kind of what I was thinking, Guess its kind of like going to Vegas abd betting on the rain
     
  4. Leper

    Leper 1/2 ton status

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    It's a cushion. Kinda like an insurance policy in case you lose your a$$.
     

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