Commodity markets
Bachelier – a strange new world for oil options
Model tuned to negative prices has implications for pricing, margining and delta hedging
Carbon life force: derivatives defy coal's bleak future
Coal producers shorting volatility to collect premium, say traders
Plastics hedging rising amid US chemical industry boom
Interest in plastics derivatives is rising as a result of changing market dynamics, but major obstacles still limit its growth potential, finds Stella Farrington
Q&A: French regulator defends Mifid II commodity rules
Mifid II has sparked an outcry from EU energy firms, which complain the new rules will force them to curtail hedging or even exit the markets altogether. But Vincent Derbali, an official with France's AMF and a member of Esma's commodity derivatives task…
Revenue put options gain popularity in US power markets
Dealers, led by Morgan Stanley, have made revenue put options an increasingly popular hedging tool with US electricity firms seeking to build new power plants. But some observers warn that the largely untested product contains risks for dealers and their…
Ice considers moving Brent contract to avoid EU margin hike
Ice says move is “not an outcome we want to see” but Emir margin could drive users away
SG CIB wins Risk and Energy Risk Commodity Rankings
Societe Generale Corporate & Investment Banking has topped the poll for the third year in a row in this year’s Risk and Energy Risk Commodity Rankings, which are marked by several dramatic exits and one impressive comeback
Dalian courts foreign investors for iron ore contract
DCE exploring two schemes to allow foreign firms to access its market – following recent moves to enable global firms to trade a Shanghai crude oil contract
Energy firms rely on patched-up solutions for reporting
Under new rules in Europe and the US, energy firms have to aggregate trade data from a variety of internal sources and report it to repositories. While it was hoped this process could lead to wider improvements in analytics, risk management and…
CCPs eager for first forex clearing mandate
Market participants claim a clearing mandate for non-deliverable forwards is written, but has been languishing while the Commodity Futures Trading Commission puts new leadership in place. With that now done, some say the rules could be issued within…
China copper trading hit by commodity financing crackdown
A Chinese commodity trading house is accused of securing multiple bank loans against a single stockpile of copper and aluminium, causing ructions in copper prices and a dip in trading volumes
Commodity traders won’t replace banks, says Citi’s Staley
Citi head of global commodities “doesn’t lay awake at night awaiting a full-scale assault” from non-bank companies, such as oil majors and commodity trading houses
Dalian iron ore contract boosts overall market liquidity
The Dalian Commodity Exchange saw the first delivery of its iron ore contract this month – does the success of the onshore China contract threaten Singapore Exchange’s pre-eminent position in the iron ore swaps market, and how will both be impacted by…
Crude palm oil OTC swap use on the increase as prices rise
Limited liquidity on long-dated CPO listed derivatives means users are looking to use centrally cleared OTC swaps
US energy futures may be forced out of UK CCPs
Ice Clear Europe and LCH.Clearnet may not be able to offer clearing of US futures contracts in the UK after European clearing rules take effect, lobbyists are warning. The incoming regime requires a choice of segregation models that contradicts US rules
Looking back: Regulators try to slow down OTC juggernaut
Today, regulation is a fact of life for OTC commodity derivatives traders. But in April 1994, it was somewhat novel, as Energy Risk reported at the time
EEX seeks Asia commodity derivatives boost
Cleartrade Exchange acquisition based on greater prospects for growth in Asian commodity markets
Commodity position limits may make hedgers think twice
Dodd-Frank and Mifid II position limits could cause firms to withdraw from commodity derivatives
Oil majors step up commodity derivatives market making in Asia as banks cut back
Handicapped by tighter regulations, banks have ceded derivative market-making share to oil majors such as BP and Shell
Supply glut heats up Vietnam coffee derivatives market
Overproduction and resulting lower prices could spur development of nascent sector
Dalian iron ore futures contract trading volume falls away as question marks linger
Strong volumes on the first day of trading tailed off over the week although players deem it early days for determining the contract's success