How to measure cache performance?

What are the key elements to measure the performance of a hedging desk in a commodities trading firm?

• My understanding of using paper products to hedge physical trading is kind of buying an insurance. So in the commodities firm, their paper trading desk serve a different purpose with proprietary trading. In this case, how to measure the performance of the hedging desk? Update: Example: Coal trading company, with 20 million tons of thermal coal annual, purchased  at API5 index contract . Delivery every month, depends on the sales department. In this case, if using paper contract to hedge, then the index cost will convert to fix price. In this case, how to measure a hedge desk's performance?

• Answer:

  Are you trying to calculate the the value added by the hedge or the efficiency of executing that hedge?  The value added is the net performance of the combined strategies while the efficiency takes into account transaction cost analysis which may be measured in many different ways.