Comments on: Richard Branson: Oil Crunch by 2015. Crude Oil Spreads: Not As Far As We Can See

By: How To Marry Fundamental & Technical Analysis | MartinKronicle

How To Marry Fundamental & Technical Analysis | MartinKronicle — Thu, 01 Apr 2010 08:29:30 +0000

[...] see that each successive month is higher in price than the previous month. As I wrote about about Sir Richard Branson’s 2015 market call on Crude oil, this is known as a carry-charge market and it’s said to be in contango. Markets in contango [...]

By: martinkronicle

martinkronicle — Fri, 19 Feb 2010 13:21:18 +0000

Yes, if Virgin used commodity futures, there would be that much more
carry charges. There is no time decay though.

By: Bend

Bend — Fri, 19 Feb 2010 13:01:20 +0000

In hedging their exposure 5 years from, would buying a future so far out be much more expensive than buying a nearer horizon future (as would be the case for an equity option)?

By: martinkronicle

martinkronicle — Fri, 19 Feb 2010 05:21:18 +0000

Yes, if Virgin used commodity futures, there would be that much more
carry charges. There is no time decay though.

By: Bend

Bend — Fri, 19 Feb 2010 05:01:20 +0000

In hedging their exposure 5 years from, would buying a future so far out be much more expensive than buying a nearer horizon future (as would be the case for an equity option)?