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Over the summer of 2020, you sold contracts to supply heating oil to homes in Denver during the winter. You locked in a fixed price
Over the summer of 2020, you sold contracts to supply heating oil to homes in Denver during the winter. You locked in a fixed price that the homeowners pay for their oil through March 2021. You won't buy the oil until the winter of 2020, however, when you can assess demand. If you want to hedge your exposure, you would:
a. Short heating oil futures
b. Go long heating oil futures
c. Avoid futures because they speculative tools only and cannot be used to hedge
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