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Risk Management: Introduction to hedging tools (6)December 19, 2013 - 6:54 pm
Our final post in this series on the basics of bunker hedging will focus on another tool that offers executives a combination of risk reduction and flexibility. #3: Collar A collar (a combination of a call option and a put option) is a financial instrument designed to hedge a company’s fuel exposure by […]
Risk Management: Introduction to hedging tools (5)December 12, 2013 - 2:17 pm
Certain market situations or attitudes to risk by company executives require instruments with more flexibility then a swap. Rather than locking in a particular bunker price for a defined time period, a hedger may prefer to retain some exposure to fuel prices while setting an upper limit, beyond which he would be unwilling to […]
Introduction to hedging tools (4)December 4, 2013 - 10:14 pm
Following on from our initial three installment series on the principal reasons to hedge fuel price risk, we are going to explore the basic tools available to companies who wish to implement a bunker risk management strategy. #1: Swaps A swap is a financial instrument that allows the buyer to hedge his bunker […]
Why you should hedge bunkers in today’s market (3)December 4, 2013 - 12:24 pm
The third installment of our series on bunker hedging will focus on the final two major reasons why companies, government agencies and ‘not-for-profit’ corporations should manage their fuel price risk. #5: Attract quality investors Attracting quality investors is tremendously important, whether it is a long-term institutional asset manager or pension fund buying shares […]
Why you should hedge bunkers in today’s market (2)November 20, 2013 - 5:17 pm
The second installment of our series on bunker hedging will focus on two more compelling reasons why companies should manage their fuel price risk. #3: Secure Competitive Advantage One of the most important reasons to manage price volatility in fuel markets is to secure a company’s competitive edge. If you ask an executive […]
Why you should hedge bunkers in today’s market. (1)September 10, 2013 - 9:11 am
In recent years, geo-political events, financial crises and government regulations have led to increased energy and fuel price volatility and heightened business risks for companies that are exposed to the global energy markets. With as much as 70% of shipping companies costs being fuel-related, volatility in bunker markets can erode margins and frustrate customers who […]