Hedge funds lured by the choppy waters of freight derivatives

freight derivatives

There's a buzz surrounding the hitherto sedate freight derivatives market. Long used by oil companies wanting to hedge rising or volatile shipping costs, the market is now increasingly viewed as a place in which financial institutions, including hedge funds, can operate and make money.

Traded volumes of forward freight agreements (FFAs) quadrupled in 2004, according to most estimates, and turnover rose from $2bn-$4bn in 2002 to more than $30bn in 2004.

"Freight is increasingly being recognised

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