Tag Archives: insurance risk premium

Commodities: A Deeper Dive Into the Five Potential Sources of Return

In a prior post, we listed five components of returns that commodities futures can provide. In this post, we will delve deeper into each component. Insurance risk premium, according to Keynes’s theory, is earned when a market participant rolls their futures position and the price of the next futures contract is discounted against market expectations Read more […]

Commodities: Five Potential Sources of Return

Market participants have historically invested in commodity futures-based indices for their inflation protection and diversification benefits, given their low correlation to stocks and bonds. However, the returns earned from investing in commodities differ from those earned from traditional asset classes, in that commodities have no expected book value or expected cash flow, while a commodities’ Read more […]

Why Oil Index Investors Should Be Flying High

Today in the Wall Street Journal, there is an article, “Airlines Retreat on Fuel Hedging“, that highlights the losses airline companies suffered by hedging against oil and gas rises. However, the article also points out that not all airlines hedged, including American Airlines Group (NASDAQ: AAL), who enjoyed the benefit of cheaper fuel. Scott Kirby, president of Read more […]