Applied risk management series: OTC commodity swaps valuation, hedging and trading

OTC commodity swaps valuation, hedging and trading

OTC swap markets

In a fixed-for-floating swap, two parties agree to exchange the difference between a floating price and a fixed price, multiplied by a negotiated notional amount for one or more settlement periods. Single-settlement swaps are also referred to as ‘forwards’ by many market participants. Swaps are financially settled, which means that the parties meet their contractual obligations by cash transfers.

When a hedger enters into an over-the-counter swap, they receive compensation when the market moves

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: