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Hedging Commodities

A practical guide to hedging strategies with futures and options

By Slobodan Jovanovic
Cover of Hedging Commodities (Paperback) by Slobodan Jovanovic

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About the Author

Slobodan Jovanovic

Slobodan Jovanovic is an experienced trader of non-ferrous and precious metals. Born and educated in Belgrade, his business career started in 1980 at Invest Import, one of the largest export and import companies in former Yugoslavia. He was the first to conclude "Trepca" silver bullions export deals with Philipp Brothers of London, and Intermercur in Zurich. During this period he also became very ... Read more on Slobodan Jovanovic

Contents Listing

PREFACE
CORE OBJECTIVES

PART 1. FORWARDS, FUTURES & SWAPS
1. Evolution of Trade: From Physical to Derivative
2. Introduction to Futures
3. Commodity Futures Pricing
4. Hedging Basics
5. Hedge Patterns with Futures
6. Commodity Futures Spreads
7. Basis Controversy
8. Commodity Swaps

PART 2. BASIC FEATURES AND STRATEGIES OF OPTIONS
9. Introduction to Options
10. Basic Directional Trading Using Options
11. Hedge Patterns with Options
12. Typical Equity Hedging Strategies

PART 3. OPTIONS PRICING MODELS
13. Determinants of Options Value
14. European Put & Call Pricing Bounds
15. Black-Scholes Pricing Model
16. Binomial Option Pricing Model
17. Parity Relations

PART 4. ADVANCED HEDGING STRATEGIES
18. Hedging Long Underlying with a Bear Call Spread
19. Hedging Short Underlying with a Bull Call Spread
20. Collars and Fences
21. Conversions and Reversals
22. Covered Short Straddle & Strangle
23. Accrued Profits Protection

PART 5. OPTIONS SPREADS & COMBINATIONS
24. Option Spread Strategies
25. Call Ratio Spreads
26. Put Ratio Spreads
27. Options Combinations
28. Synthetic Instruments

Index
PREFACE
CORE OBJECTIVES

PART 1. FORWARDS, FUTURES & SWAPS
1. Evolution of Trade: From Physical to Derivative
2. Introduction to Futures
3. Commodity Futures Pricing
4. Hedging Basics
5. Hedge Patterns with Futures
6. Commodity Futures Spreads
7. Basis Controversy
8. Commodity Swaps

PART 2. BASIC FEATURES AND STRATEGIES OF OPTIONS
9. Introduction to Options
10. Basic Directional Tr ...

Jacket Text

This book is an invaluable resource of hedging case studies and examples, explaining with clarity and coherence how various instruments - such as futures and options - are used in different market scenarios to contain, control and eliminate price risk exposure. Its core objective is to elucidate hedging transactions and provide a systematic, comprehensive view on hedge performance.

When it comes to hedge strategies specifically, great effort has been employed to create new instruments and concepts that will prove to be superior to classic methods and interpretations. The concept of hedge patterns - introduced here - proves it is possible to tabulate a hedging strategy and interpret its use with diagrams, so each example is shown visually with the result of radical clarity.

A compelling visual pattern is also attached to each case study to give you the ability to compare different solutions and apply a best-fit hedging strategy in real-world situations.

A diverse range of hedging transactions showing the ultimate payoff profiles and performance metrics are included. These have been designed to achieve the ultimate goal - to convey the necessary skills to allow business and risk management teams to develop proper hedging mechanisms and apply them in practice.

Professional Reviews

"The book is easy to follow providing very simplified and clear examples of how to identify physical risk exposure and implement hedging concepts and strategies in various market circumstances." - Shanghai Metals Market


Media Coverage

Shanghai Metals Market

Nowadays, many providers of asset-valuation software sell more than thirty different financial models, employing more than one hundred different derivative securities intended to prevent damage from ...

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