There is a fundamental difference between speculation and arbitrage. The speculator deliberately takes large risks in the hope of large profits. The arbitrageur is not interested in increasing risks, in fact, he wants to reduce them. His main instrument is the straddle with two legs: a long leg representing purchase in one market, and a short leg representing a compensating sale in another. In closing out the straddle both legs must be lifted simultaneously, otherwise the arbitrage is turned into speculation. The activity of the arbitrageur is also known as hedging, and another name for a straddle is a hedge. As the objectives of speculation and arbitrage are diagonally opposite to one another, it is a bad mistake to confuse the two, as is the case all too often. This confusion is epitomized by the story about the Texas rancher. When it was pointed out to him that the long positions in cattle futures he was affectionately calling "me hedges " were in fact no hedges at all because they lacked the short leg, he proudly answered: "them are Texas hedges. " The title of this paper suggests that the hedges of Barrick are no hedges at all because they lack the long leg. Limited versus Unlimited Liabilit
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