Without any risk – a comprehensive risk management system should also take account of risks arising from commodity price trends. Forward transactions, options and option strategies as well as metal-indexed interest strategies for hedging or optimisation purposes can be used in this connection.
All contracts can be concluded in euros and US dollars with maturities of up to two years – in some cases even up to five years. As there is no physical delivery, a cash settlement takes place on maturity. In addition, you can profit from fluctuations in the commodity sector in the investment field.
- Passing on of risk: securing flows and inventories of goods to smooth and improve predictability of corporate results
- Optimisation: strategies to compensate for rapid price movements; dampening the effects of the current price situation
- Commodity investments: investment strategies to complement and diversify an existing portfolio
You can currently trade the precious metals gold, silver, platinum and palladium as well as the base metals aluminium, copper, zinc, lead, nickel and tin. Alloys can be hedged on the basis of an appropriate weighting of the base metals. In the case of the base metals, the minimum trade size is one lot (e.g. copper 25 tonnes, nickel 6 tonnes). In addition, you can hedge crude oil (Brent) and gas oil.
We can also hedge so-called “soft commodities” (cotton, coffee, cocoa, live cattle, lean hogs, corn, feeder cattle, soybeans, soybean oil, wheat, red wheat and sugar) through forward transactions. We are still working on option-based hedging.
- Smoothing of operating results
- Avoiding unwanted swings in the P+L by selectively applying control tools
- Using forward discounts to possibly lower raw material costs
- Simple hedging possibilities based on cash settlement
- High volatility and the expectation of further increases in commodity prices present investors with opportunities to successfully diversify their portfolios