Podcasts Culture 4.7 Lets stack and roll like we did last summer

4.7 Lets stack and roll like we did last summer

Published: Oct. 8, 2020, 8:23 p.m.

Traders make money by selling bespoke solutions and hedging the risk with listed securities.  The resultant risk is called basis and running this risk is the strategy for such groups.  One basis is the maturity mismatch between what the trader sells to what they use as a hedge.  The strategy is to roll the hedge several times.  The podcast describes the most famous failing of a stack and roll strategy, namely Metallgesellschaft and their oil trading.

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