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gasinsurance

Gas Insurance
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(+4, -5)
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Pay yearly to fix gas prices at a specific level. The insurer takes the premiums and invests them in hedges against the price of gas. Price goes up, insurer makes money in the market. Price goes down, no insurance necessary. Consumers get a more stable price of gasoline.
iamnafets, Jun 22 2008

Guaranteed $2.99/Gal http://www.chrysler.com/en/refuel/
"As fuel prices continue to rise, the Let's Refuel America Program helps providing stability to the cost of fuel with a simple solution - locking in the price of unleaded or diesel fuel at $2.99/gallon for three years." (You just have to buy one of Chrysler's gas guzzlers) [Klaatu, Jun 23 2008]

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       This is how oil market futures traders make their money. They prefer an unstable price that they can "bet" on .... a "stable" price for consumers is the last thing they want.
8th of 7, Jun 22 2008
  

       Thats not true, 7th of 8. Only the ignorant or willful gamblers use stock and futures markets like a casino.
Voice, Jun 23 2008
  

       The idea of futures trading is that the trader agrees to buy an item at price $X at a fixed future date, in the hope that on that date, the market price will be $Y where $Y > $X. The trader's "profit" (less margins and costs) is the difference between the two prices.   

       Traders therefore have a vested interest in increasing commodity prices.   

       Q.E.D.
8th of 7, Jun 23 2008
  

       Not all traders are bears, [8th]; at any given time, some of them have a vested interest in *decreasing* commodity prices. However, you're right that full-time professional traders (as opposed to people in other industries who are looking for a hedge) are against stability.
pertinax, Jun 23 2008
  

       // some of them have a vested interest in *decreasing* commodity prices. //   

       Yes, some will want to sell short. That's how the market works. But neither Bears nor short sellers want stability.
8th of 7, Jun 23 2008
  

       So we agree. {checks nervously for implants, and other signs of assimilation}
pertinax, Jun 23 2008
  

       You won't know until it's too late ...
8th of 7, Jun 23 2008
  

       So you have to pay to ensure you don't have to pay more? Not sure I like the sound of that.   

       On a side note though, I'm guessing you [iamnafets] are American by your use of the word 'gas'.. come to the UK mate, our petroleum prices will give you a heart attack. I kid you not.
kuupuuluu, Jun 23 2008
  

       //neither Bears nor short sellers want stability// Bears are short sellers. Although, if new thinking is to be believed we have bull-bears and bear-bulls, Freakonomics my left labia. <rushes off to add female tag to profile>
4whom, Jun 23 2008
  
      
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