One Night Stand Pricing

What's more important: upside or stability?

That debate constantly rages amongst commodities producers. Especially when it comes to deciding whether to sell gold, copper or oil at spot versus long-term pricing.

Long-term pricing is the stable option. Like being in a good marriage. A seller has a decent price, one they can count on. There probably aren't going to be any big surprises. An acceptable profit will be made.

Spot pricing is the "one-night stand" of the sales world. Each day you're going to get something new and different. There's a certain thrill in knowing tomorrow could be the "big score" when prices go through the roof (investors love this).
Full article at: Commodities Pricing

 

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