Risk management
Risk management key for freight, says Baltic Exchange chief
Baltic Exchange chief executive Jeremy Penn has stressed the importance of risk management at a forum of freight derivatives brokers and traders this week.
LCH.Clearnet launches OTC clearing for freight derivatives
LCH.Clearnet has launched an OTC clearing service for the forward freight agreements (FFAs).
Trading routes open
The coal and dry bulk shipping markets are tightly intertwined and the strong influence of each on the other provides some interesting arbitrage opportunities, which are starting to draw wider attention, writes Barry Parker
Coal facing changes
Coal derivatives trading is gaining popularity among coal consumers, producers and financial institutions in Europe, according to a recent survey of market players. Cyriel de Jong and Kasper Walet discuss the study’s results
James Tweed and Dave Wardley
At the end of last year, JAMES TWEED and DAVE WARDLEY launched the first hedge fund dedicated solely to trading freight. Stella Farrington meets them
A disciplined approach
E&P companies tend not to strategically hedge in a rising market. But there are good reasons for them to do so, and some are sticking to their hedging strategies, despite suffering losses on their derivatives contracts. By Joe Marsh
Pieces of a puzzle
To get enterprise-wide risk management to work, a firm needs to piece together the right models, processes and software – and the right attitude. US utility Allegheny Energy has done just that, finds Oliver Holtaway
Understanding Sam
The Samuelson Effect – backwardation in the term structure of forward volatility – can lead to valuation inaccuracies. In capturing the Samuelson Effect in energy derivatives valuation, analysts have tried both historical approaches and those that rely…
Hoodwinked!
Have you got a good grip on your view of volatility and correlation? Neil Palmer shows that, thanks to ever -present measurement errors, even the steadiest markets can throw up big surprises
Great expectations?
Risk and expectation are two sides of the same coin. But could you quantify your own risk appetite? explores some ways to put a price tag on those hazards you can’t avoid Neil Palmer
The energy equation
Quantitative analysis in the energy industry is undergoing a crucial transition as it moves out of the role of secondary support to sit at the heart of business decision-making. Stella Farrington looks at its advance
Chris Bowden
With energy prices skyrocketing, risk management is now a necessity, not an option, says energy risk pioneer Chris Bowden . By Stella Farrington
Delivering the goods
There’s huge scope for growth in the freight derivatives market, but to attract more players, existing participants need to adopt more innovative and sophisticated trading practices, participants say. Stella Farrington reports
BNP Paribas strengthens energy derivatives team
French bank BNP Paribas has strengthened its commodity derivatives team in New York, London and Singapore, particularly on the energy side.
Nymex, Icap to launch gas, crude oil daily settlement derivatives
The New York Mercantile Exchange (Nymex) and inter-dealer broker Icap are to launch an electronic market in same-day over-the-counter (OTC) options on prompt-month settlement prices for crude oil and natural gas. Starting on Monday (July 18), the…
In pole position
Sakonnet’s Thurstan Bannister says a sound footing in risk management and a customer-facing approach is the secret of his company’s success. By Stella Farrington
Keep it simple, stupid
Do you prefer sophistication or simplicity? Neil Palmer takes a look at optimisation methods in energy modelling and asks if energy quants aren’t sometimes being a little too heavy-handed
Some brokers taking wrong approach to freight, says senior broker
Inter-dealer brokers could be taking the wrong approach by entering the freight derivatives market through joint ventures with physical shipping brokers rather than directly broking physical freight, says a senior energy broker.
Struggling for growth
All three Canadian energy exchanges – NGX, Watt-Ex and NetThruPut – are finding it slow-going with their expansion plans. Meanwhile the rivalry between NGX and Watt-Ex is growing. Joe Marsh reports
The technology trap
Large banks are increasingly looking to energy trading to improve liquidity and develop relationships with large institutional and industrial clients. James Kemp looks at some of the technological challenges they face
Checking outside the box
Companies often use checklists to evaluate their IT buying requirements. But these rarely address what the firm actually needs. Brett Humphreys discusses how over-reliance on checklists may lead to poor software buying decisions
A growing concern
Despite high natural gas prices, Canadian fertiliser maker Agrium has been posting strong profits, while some rivals have struggled. The company’s risk-management strategy has been a significant factor in its success. By Joe Marsh