Octopus

Well, yes, this is all well and good:

Both Bulb and Octopus brought fresh entrepreneurship into a creaking sector, as two of the challenger suppliers founded over the last decade to take on the legacy Big Six suppliers – with better customer service and cheaper deals.

But their divergence in fortunes is down to Octopus’s better hedging strategy

But how far forward does that hedging book go? And will the price cap move before it runs out – or prices return to some normality before the price cap doesn’t go?

Hedging’s great but as with Keynes and liquidity, the market can be against your book longer than your hedge lasts.

2 thoughts on “Octopus”

  1. When demand was suppressed by lockdown hedging was cheap, or at least not too painful.
    Now it’s another price universe. Gas retailers must be hoping for another lockdown so they can roll over their forward purchases.
    What a mess Ofgem and government interference has made.

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