Managing commodity price risk through physical contracts
StoneX’s award-winning risk management consultants combine deep market intelligence and global commodity market access to provide clients with effective hedging strategies that mitigate risk and protect from financial loss.
Three reasons to have physical commodities as part of your risk management hedge strategy
- Hedging establishes an equal and opposite position relative to the cash market so that volatility’s impact on margins can be minimized.
- A properly designed hedging strategy not only protects your company from the financial consequences of commodity volatility, but also provides management with vital decision-making information.
- A hedging strategy is the overarching solution to procuring the materials you need to protect your company’s supply chain against fluctuating commodity prices.
The StoneX approach to risk management via physical contract
A strong hedging strategy to counteract commodity price volatility will help maintain consistent revenue forecasts, anticipate accurate operating costs and profit margins, execute cost-efficient expansion plans, and deliver premium-quality customer service. Explore why customers choose StoneX for their hedging needs.
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Hedging with futures
The StoneX price-risk management team helps clients lessen the risk of a loss in the cash market by taking an opposite position in the futures market.
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What are common hedging strategies?
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StoneX Commodity Solutions, LLC (“SXCS”), a subsidiary of StoneX Group Inc., trades in a variety of physical commodities, and oﬀers customers services to help manage the risks associated with their physical product. Trading over-the-counter and exchange-traded derivatives is not suitable for all investors and involves substantial risk. This material does not constitute investment research and does not take into account the particular investment objectives, ﬁnancial situations, or needs of individual clients or recipients of this material. You are directed to seek independent investment and tax advice in connection with derivatives trading.
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