Part Three: Understanding Spreads Helps Assess Hedging Risks
Spreads help “tell a commodity’s story” sharing important information about that commodity that can help a business assess their hedging risks.
Posts
Part Eight: Conclusion & an Introduction
In our Hedging 101 series, our goals were to provide information about hedging in a way that “Kept Things Simple”, while also providing the building blocks to understand basic hedging concepts in action. This post reviews some terms and concepts we’ve covered in this series, and gives a brief overview of where we want to go next with hedging!
Part Seven: Financial Swaps
Hedging 101 has discussed many different strategies to protect against risk, including prebuy, fixed price products, and futures contracts. In this post, we want to look at how financial swaps can reduce risk when a fuel distributor is using a financial hub product.
Part Six – Futures Contracts
Hedging 101 has discussed using different strategies like prebuy and fixed price products to protect against risk. In this post, we want to talk about another strategy – futures contracts. Come with us as we look at how using a financial hub product plus basis can help you navigate some of the risks of the fuel industry.
Part Five: Risk Policies
Hedging 101 has defined basic terms and given examples of hedging using different tools. In this post, we take a quick detour to talk about the not so glamorous, but necessary, part of hedging – risk policies.
Part Three: Beginning to Hedge
In our Hedging 101 series we defined basic terms, such as “hedge,” and have identified risks a business needs to protect against. We now move into the process of beginning to hedge or protect against those risks.
Part Two: Identifying Risks
Our Hedging 101 series began by defining a “hedge” as a way to protect against risk. With that basic building block in place, we can move on to the next step – identifying what risks a business needs to protect against.
Hedging 101
Hedging 101 is our way of answering some of the questions and comments we have received over 25 years in the industry. We want to do this so that those just starting out, as well as seasoned industry pros can benefit from the series.
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We enjoy working with Twin Feathers. Great people who have helped our business!
Will
Twin Feathers has taken the burden of the everyday supply logistics off our plate and allowed us to focus on our operations in the critical times of the year. They have educated our team along the way and helped us brainstorm options/risks that fit our business model. Twin Feathers has allowed the Tevis organization to explore opportunities within the supply and hedging arena that we would not have been exposed to without the relationship.
Dave
We experience less angst when making a futures purchase.
Jeff
They not only taught us how to plan and diversify our supply, but also new ways to protect the price. They have been great at negotiating supply deals and putting plans in place to know we will be secure when the market is not. I am confident that if things get tight we will be in a better position than our competitors.
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It has been one of the best decisions that our company has ever made. The Twin Feathers team have looked after our interests since day one, and have executed the plan each year very well.
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Twin Feathers has partnered with energy firms since 1998 to provide transparent, value-driven commodity market advisory services.
