Hedging Commodities
Hedging Commodities is an invaluable resource of hedging case examples and studies. It explains how various instruments like options and futures are used in different market scenarios to control, contain and eliminate price risk exposure with coherence and clarity. The book’s aims to provide a comprehensive and systematic view on hedge performance and elucidate hedging transactions. It has a wide range of hedging transactions providing the ultimate payoff performance and profiles metrics are included, and a compelling visual pattern is attached to each case study to show readers the ability to apply a best-fit hedging strategy in real-world situations and compare different solutions.
Table of Contents
Preface
Core Objectives
PART 1. Forwards, Futures & Swaps
Evolution of Trade: From Physical to Derivative
Introduction to Futures
Hedging Basics
Hedge Patterns with Futures
Basis Controversy
Commodity Swaps
PART 2. Basic Features and Strategies of Options
PART 3. Options Pricing Models
European Put & Call Pricing Bounds
Black-Scholes Pricing Model
Parity Relations
PART 4. Advanced Hedging Strategies
Hedging Long Underlying with a Bear Call Spread
Hedging Short Underlying with a Bull Call Spread
Collars and Fences
Conversions and Reversals
Covered Short Straddle & Strangle
Accrued Profits Protection
PART 5. Options Spreads & Combinations
Option Spread Strategies
Call Ratio Spreads
Put Ratio Spreads
Options Combinations
Synthetic Instruments