06 Hedging

Petroleum products
price hedging.

Commodity
Vacuum resid
Instrument
Over-the-counter insurance agreement
Risks
Market, intrinsic price and exchange-rate

Commodity price exposure

For commodities with limited trading, direct access to options and futures may be restricted.

This project analysed an oil product’s price risk through the design of an over-the-counter insurance agreement.

Agreement design

We designed and priced an insurance agreement for vacuum resid.

The analysis considered market risk, the product’s intrinsic price risk and exchange-rate risk in a multidimensional agreement.

Pricing a similar risk? Get in touch

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