Whatever floats your boat - brokers engage in derivative origami to build 'paper' vessels
Brokers are helping hedge funds say, 'Hello sailor!' by putting the two in touch, to help funds profit from specific voyages and also replicating voyage risk exposure by derivatives for hedge funds, they tell David Walker
Shipping derivatives brokers are putting hedge funds and other financial institutions in touch with ship owners to provide the former with exposure to specific ships plying specific routes, without the hedge fund taking control of the vessel, and also building such 'synthetic boats' out of derivatives instruments.
Adam Sonin, head of freight derivatives at ACM/GFI, says the broker can use its connection to ACM Shipping to effect the link - including open book accounting by the ship owner for the
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