Full steam ahead for FFAs

Freight derivatives

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Interest in the freight derivatives markets is on the rise once again. After suffering flagging volumes from mid-2004 through to early 2006, trade has picked up in both wet and dry markets over the past year or so. Rising volumes of forward freight agreements (FFAs) can be attributed to the spread of clearing, which has attracted more participants into the market and in turn opened up new opportunities. As well as giving smaller institutions with poorer credit ratings a way into the market,