On a business forum that I frequent, you can one of my old posts about how I came to develop this method. This was in May of 2010.
I bought 62.5603 troy ounces of silver (junk silver form) at a basis of $15.03 per ounce.
At the time, silver was trading for $19.48 per ounce.
Before I could sell, silver had dropped to around $17.50 per ounce, which made me realize the need for a hedge. I would have saved myself almost two dollars per ounce – this alone would have doubled my profits and reduced my volatility risk.