How well companies manage these risks could help separate the winners from the losers. Managing risk is a proactive process, where, in dynamic markets, people are actively seeking to change their positions so that their institution has the risk profile they want it to have. With derivatives products and options you can pick any point of the payoff distribution and sell off the others. Our proposed risk management program, discussed below, not only protects the pump profit margins with a minimum amount of risk from the spot market, but also offers us an opportunity for extraordinary upside profit with no additional risk. Risk could be canned and sold like tomatoes.
Different investors place different prices on risk.
If you are able, as it were, to buy risk from one investor cheaply and sell it to another investor dearly, you can make money without taking any risk itself. We're not here to generate a profit. It's to be a partner with operating lines to manage risk. And we have heated and interesting discussions on the management of risk. I consider risk management too serious to be left solely to risk managers.