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ĞǆĂĐƚůǇŚŽǁŵƵĐŚƉƌŽƚĞĐƟŽŶƚŚĞǇǁĂŶƚĂŶĚŚŽǁŵƵĐŚƚŚĞǇ are willing to pay for it. ͞/ƚŝƐĨƵůůǇĐƵƐƚŽŵŝǌĂďůĞ͕͟^ƵůůŝǀĂŶĞǆƉůĂŝŶƐ͘͞>Ğƚ͛ƐƐĂǇĨŽƌ example, a renderer knows a price for their product that is ďĞůŽǁΨϭŝƐƚŚĞĐƵƚŽīƉŽŝŶƚĨŽƌǁŚĞŶƚŚĞƉƌŝĐĞƐƚĂƌƚƐƚŽĂīĞĐƚ ƚŚĞŵŶĞŐĂƟǀĞůǇ͘dŚĂƚďƵƐŝŶĞƐƐĐĂŶĚĞĐŝĚĞƚŽƉƌŽƚĞĐƚŝƚƐƉƌŝĐĞ ƌŝƐŬĨƌŽŵΨϭĚŽǁŶƚŽϱϬĐĞŶƚƐ͘dŚĂƚƉƌŽƚĞĐƟŽŶǁŝůůĞŶĚƵƉ ĐŽƐƟŶŐƚŚĞŵƐŽŵĞƚŚŝŶŐʹůĞƚ͛ƐƐĂǇϲĐĞŶƚƐ͘ ͞EŽǁ͕ ŝĨ ƚŚĞǇ ĚĞĐŝĚĞ ƚŽ ŝŶƐƚĞĂĚ ƉƌŽƚĞĐƚ ƉƌŝĐĞ ĨƌŽŵ Ψϭ Continued on page 12 ŝŶƚŚĞĨƵƚƵƌĞƐŵĂƌŬĞƚ͕ďĞĐĂƵƐĞŝƚ͛ƐƚŽŽƐƉĞĐŝĮĐ Žƌŝƚ͛ƐƚŽŽŶŝĐŚĞ͘ ͞tŚĂƚ^ƚĂďůĞĚŽĞƐŝƐǁĞĂƉƉƌŽĂĐŚŝƚĨƌŽŵ ĂĚŝīĞƌĞŶƚĂŶŐůĞ͕͟^ƵůůŝǀĂŶĞǆƉůĂŝŶƐ͘͞tĞŬŶŽǁ there are people that want to manage risk, but they have no tools and the price for these ƉƌŽĚƵĐƚƐĐĂŶďĞǀŽůĂƟůĞ͘^Ž͕ǁŚĂƚǁĞĨŽĐƵƐŽŶ ĮƌƐƚ ĂŶĚ ĨŽƌĞŵŽƐƚ ŝƐ ǁŚĞƚŚĞƌ ƚŚĞƌĞ ŝƐ Ă ƉƌŝĐĞ series available. For example, we know there is price data for many rendered products because ǁĞŚĂǀĞĂƉĂƌƚŶĞƌƐŚŝƉǁŝƚŚdŚĞ:ĂĐŽďƐĞŶ͕ǁŚŝĐŚ ƚƌĂĐŬƐĂůůƚŚĞƐĞĐŽŵŵŽĚŝƟĞƐ͘͟ /ŶĨĂĐƚ͕^ƚĂďůĞƵƟůŝǌĞƐĞǆŝƐƟŶŐĚĂƚĂĨƌŽŵĂůů kinds of sources, including the U.S. Department ŽĨ ŐƌŝĐƵůƚƵƌĞ ʹ ŝŶ Ăůů ĂďŽƵƚ ϲϬ ƉƌŝĐĞͲƌĞƉŽƌƟŶŐ ĂŐĞŶĐŝĞƐĨƌŽŵϳϬĐŽƵŶƚƌŝĞƐ͘dŚĂƚĚĂƚĂŝƐƵƐĞĚďǇ ƚŚĞĐŽŵƉĂŶǇƚŽƐĞƩůĞĐŽŶƚƌĂĐƚƐĚŝƌĞĐƚůǇĂŐĂŝŶƐƚ a relevant reference price. Stable hosts an index- ďĂƐĞĚƉůĂƞŽƌŵĂŶĚůŝƐƚƐŵŽƌĞƚŚĂŶϱϬϬƵŶƚƌĂĚĞĚ ĐŽŵŵŽĚŝƟĞƐƚŚĂƚĐĂŶŶŽǁďĞŚĞĚŐĞĚ͘ ͞tŝƚŚƚŚŽƐĞƌĞĨĞƌĞŶĐĞƉƌŝĐĞƐ͕ǁĞĐĂŶƚŚĞŶ structure these risk management products that ĨƵŶĐƟŽŶǀĞƌǇƐŝŵŝůĂƌůǇƚŽŝŶƐƵƌĂŶĐĞ͕͟^ƵůůŝǀĂŶƐĂǇƐ͘ ͞>Ğƚ͛ƐƐĂǇǇŽƵƐĞůůĂůŽƚŽĨǇŽƵƌƉƌŽĚƵĐƚďĂƐĞĚŽī dŚĞ:ĂĐŽďƐĞŶƉƌŝĐĞĨŽƌĐŚŽŝĐĞǁŚŝƚĞŐƌĞĂƐĞ͘zŽƵ want to protect against that price crashing down. So, what you can do is buy a price-insurance policy from Stable that protects against the price of that Jacobsen reference price going down. If the price ĚŽĞƐŐŽĚŽǁŶŝŶƚŚĞƟŵĞĨƌĂŵĞǇŽƵŚĂǀĞĐŚŽƐĞŶ ƚŽ ƉƌŽƚĞĐƚ͕ ǇŽƵ͛ůů ŐĞƚ Ă ĮŶĂŶĐŝĂů ƉĂǇŵĞŶƚ ĨƌŽŵ ^ƚĂďůĞƚŽŽīƐĞƚƚŚŽƐĞůŽƐƐĞƐǇŽƵĂƌĞƐĞĞŝŶŐŝŶƚŚĞ ĐĂƐŚŵĂƌŬĞƚ͘͟ KŶ ƚŚĞ ŽƚŚĞƌ ƐŝĚĞ ŽĨ ƚŚĂƚ ƚƌĂŶƐĂĐƟŽŶ ĂƌĞ reinsurers, companies that exist to take on ĮŶĂŶĐŝĂůƌŝƐŬƐĨƌŽŵŽƚŚĞƌŝŶƐƵƌĂŶĐĞĐŽŵƉĂŶŝĞƐ͘ ^ƚĂďůĞ͛Ɛ ĐŽŶƚƌĂĐƚƐ ĂƌĞ ďĂĐŬĞĚ ďǇ ͲƌĂƚĞĚ ƌĞŝŶƐƵƌĂŶĐĞƉĂƌƚŶĞƌƐ͘^Ž͕ŝŶĞīĞĐƚ͕ƚŚĞĐŽŵƉĂŶǇ is using an old-fashioned method of risk ƉƌŽƚĞĐƟŽŶʹƚŚĞŝŶƐƵƌĂŶĐĞŵŽĚĞůʹďƵƚĂƉƉůǇŝŶŐ it to previously unprotected markets and ĞŶŚĂŶĐĞĚǁŝƚŚƚŽĚĂǇ͛ƐŚŝŐŚͲƚĞĐŚ͕ĚĂƚĂͲĂŶĂůǇƐŝƐ ƚŽŽůƐĂŶĚĞǆƉĞƌƟƐĞ͘ ĚĚŝƟŽŶĂůůǇ͕ ŽŶĐĞ Ă ĐůŝĞŶƚ ĚĞĐŝĚĞƐ ŽŶ ƚŚĞ ƐƉĞĐŝĮĐƐŽĨƚŚĞŝƌĐŽŶƚƌĂĐƚĂŶĚƉĂǇƐƚŚĞƉƌĞŵŝƵŵ͕ ƚŚĞǇĚŽŶ͛ƚŚĂǀĞƚŽƉƵƚĂŶŽƚŚĞƌĚŽůůĂƌƚŽǁĂƌĚŝƚʹ unlike futures market traders who run the risk of needing more funds to meet a margin call when ƚŚĞŵĂƌŬĞƚŵŽǀĞƐƐƵĸĐŝĞŶƚůǇĂŐĂŝŶƐƚƚŚĞŵ͘/Ĩ they get to the end of their contract and the price of their ĐŽŵŵŽĚŝƚǇĚŝĚŶ͛ƚŐŽĚŽǁŶďĞůŽǁƚŚĞĐŽŶƚƌĂĐƚƐƉĞĐŝĮĐĂƟŽŶƐ͕ ƚŚĂƚŝƐĂŐŽŽĚƚŚŝŶŐ͘EŽďŽĚǇǁĂŶƚƐƚŽŚĂǀĞƚŽĐůĂŝŵŝŶƐƵƌĂŶĐĞ because that means something went wrong. KŶĐĞƚŚĞƉƌĞŵŝƵŵŝƐƉĂŝĚ͕ĂĐůŝĞŶƚĚŽĞƐŶ͛ƚŚĂǀĞƚŽƐǁĞĂƚ out a catastrophic loss from some unforeseeable black-swan ĞǀĞŶƚ͕ĨŽƌŝŶƐƚĂŶĐĞĂŶŽƵƚďƌĞĂŬŽĨĨƌŝĐĂŶ^ǁŝŶĞ&ĞǀĞƌŝŶƚŚĞ h͘^͘Kƌ͕ƌĂƚŚĞƌƚŚĂŶũƵƐƚƉƵƫŶŐĂŇŽŽƌŽŶƚŚĞƉƌŝĐĞŝŶƚŽĂǀŽŝĚ a business-killing loss, a more aggressive client might try to ƵƟůŝǌĞ ƚŚĞŝƌ ĐŽŶƚƌĂĐƚƐ ƚŽ ŚĞĚŐĞ ŝŶ Ă ĐĞƌƚĂŝŶ ůĞǀĞů ŽĨ ƉƌŽĮƚ͘ Because the Stable model is like insurance, clients can decide www.rendermagazine.com ZĞŶĚĞƌപ:ƵŶĞϮϬϮϮപ11 /www.rendermagazine.com link /www.stableprice.com /www.rendermagazine.com link /www.stableprice.com