06 Hedging
Petroleum products
price hedging.
- Commodity
- Vacuum resid
- Instrument
- Over-the-counter insurance agreement
- Risks
- Market, intrinsic price and exchange-rate
01Commodity 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.
02Agreement 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.
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