&gt; if the price of Maya goes up in a year, he pockets the difference.<p>No: he sold an option, so the buyer can opt to do nothing; he benefits by just the price of the option.<p>As time went on he bought options in other things, trying to approximate his risk in Maya crude as if it was a blend of those other things. Those options are commonly traded, so are much cheaper than the premium he charged for the Mayan option which was very specialised.<p>&gt; what restructuring<p>He bought an equal and opposite option from the Mexican government for billions more than they paid for the first one.<p>This gave the Mexicans a cash profit, and zeroed out his risk.<p>Why was it profitable? Presumably the billions they gave the Mexicans were less than they&#x27;d actually made from the hedges, and much less than the option was really worth.