Commodities hedging is the fourth core service provided by Ryuken Capital. The firm helps its clients manage their risks related to commodities price exposure through a combination of advisory and solid trading partnerships.
Key Points on Commodities Risk
Businesses which buy and sell commodities will inevitably face commodities price risk. The risk in itself is defined as: "The potential losses resulting from adverse price fluctuations on commodities".
Commodities are notorious for being very volatile. At any point in time, huge price increases or spectacular collapses can take place. The impact on a company's financial results can be severe especially if the commodities concerned are used in large quantities and cannot be substituted.
Hedging price risk on commodities has historically been harder than on Forex. However, this does not mean that companies cannot set up an efficient hedging policy which could add significant value in managing unpredictable price swings.
Ryuken Capital as your Commodities Hedging Partner
We operate as an Introducing Broker between corporate clients looking to hedge their commodities price risk and trading entities which provide a full suite of services on commodities. Ryuken Capital fronts the commodities trading relationships for its clients and advises them on hedging strategies.
The Ryuken Framework on Commodities Hedging services in Six Points
Initial discussion with the client to understand its commodities exposure and the impact of price fluctuations on financial results.
Does the client have a hedging policy? If yes, how effective has it been so far? If no, to what extent can the client absorb the effects of sharp negative moves on the commodities to which it is exposed.
What are the expectations of the client regarding a commodities hedging partner? What matters most for the relationship to be successful?
How comfortable is the client with hedging instruments? Which instruments are the best fit for the client's hedging policy?
What is the client looking for in terms of market insight? We aim to tailor the analysis to the client's specific needs.
What Terms and Conditions would be the most satisfactory to the client while taking into consideration the constraints of the trading partners?
If you wish to expand your possibilities on Commodities Price Risk management, please contact Ryuken Capital by emailing contact@ryukencapital.com
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