Commodity Option

Secure a right for better prices

  • you will get an access to main European and US commodity markets
  • reduce your costs /increase profits according to market developments
  • without fees for execution or settlement

Commodity Option Advantages

  • financial tool, with which you can secure against fluctuations of commodity prices
  • by purchasing a commodity option you obtain the right (not an obligation) to settlement between a market price and an agreed fixed commodity price
  • you get the right to the payment of the difference in prices, if the market commodity price develops in your favour
  • contrary to the commodity swap, you are not obliged to pay the difference, if the price develops against you
  • this right has its cost – the premium
  • you pay the premium after the acquisition of the option
  • the amount of premium depends on the agreed price, its comparison with the current price, time period and assumed price movement
  • we distinguish between two basic types of commodity options:
    • Cap (Call) – is used to secure against price increase
    • Floor (Put) – is used to secure against commodity price decrease
  • by a combination of both you can create Collar (a zero-cost structure) – insure against extreme fluctuations in commodity prices
  • the product is designed for clients, whose subject of business is directly related to fluctuations in commodity prices
  • you may conclude a contract only in major global currencies
  • a minimum trade volume is €25,000

In order to get the product you need to sign a contractual documentation.

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