Benefits of Managing This Risk

The primary benefits of effectively managing your commodity price risk are:

Price Protection
You have the ability to achieve commodity price protection through either:

• The certainty of a fixed price, where you are guaranteed to receive the agreed fixed price even if commodity prices move unfavourably; or
• The flexibility of an agreed worst case price and the potential to benefit from commodity price movements in your favour.

Customisation
All of our commodity price risk management solutions are customised to your specific needs and views of the future price of commodities.

• For swaps, you can set the transaction amount of the commodity and the payment date/s.
• For options, you can set the transaction amount of the commodity, settlement date/s, transaction type (Put or Call), option style (European or American) and the strike price.
• Some of our solutions can be structured on a zero premium basis, that is, no premium payment required by you. The cost of the solution depends on the level of protection you require.

Cash Settlement
Our solutions are cash settled so there is no requirement to physically deliver your commodity to the Bank.

Simplicity
There are no brokerage fees or margin calls and the transaction can be done in the currency of your choice to avoid the need to manage exchange rate exposure.
 

Important information about advice
As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on the advice, consider its appropriateness to your circumstances. View our Financial Services Guide (PDF 59kb).