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Part Three: Understanding Spreads Helps Assess Hedging Risks

Spreads help “tell a commodity’s story” sharing important information about that commodity that can help a business assess their hedging risks.

Part Two: Spreads

In our first Hedging 201 post we looked at how the structure of a forward curve helps tell a commodity’s story. Now, we want to explore the role a spread plays in helping to interpret that story. What is a spread, and what do they do?