Lewis Hart

And so the capital needs, you kind of can figure them out within a band, but sometimes things happen that actually change what you thought.

And so the unique thing about a commodity lender is they're marking to market that inventory.

So if you pledged me a pound of copper, I'll lend you 75 cents, 80 cents, maybe more of the value of that copper, whether it's $3 a pound, 350 a pound, or 250 a pound.

Right.

In one sense, it solves the price risk.

So one of the key risks in commodity finance is the price risk.

So if I'm lending against copper and the price goes down, I better be careful, right?

My capital could be impaired.

So you use the futures market, the derivatives market to hedge that price risk.

So we like to say our clients are typically long physical, meaning they own the inventory-

And they're short paper.

They're short futures contracts.

That works really well.

But when prices go up, that means they have to post margin calls.

So if I have a $3 a pound copper shipment and the price goes to $3.50 while it's on the water coming from Chile to Georgia, that client says, I need to borrow more money to keep my hedge open.

And until the ship arrives and the client pays for the copper,

that hedges on and you don't know what that margin call is going to be.

Yeah, I think so.

Yeah.

What are you doing?