A commodity call option is a transaction in which the seller of the option pays, on a one-time basis or in instalments, the difference between the floating rate (e.g. the average of fixes in a given month) and the predetermined fixed rate (so-called strike option) multiplied by the notional volume of the commodity hedged. The seller will only pay this difference if the floating rate is higher than the strike option (or if the difference between the floating and the fixed rate is a positive number). The buyer of the option pays a premium for this hedging. This product serves to hedge the risks out of the given commodity price growth. A commodity option is only offered to hedge the risks resulting out of, and connected with, a client’s commercial activities.
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A commodity put option is a transaction in which the seller of the option pays, on a one-time basis or in instalments, the difference between the predetermined fixed rate (so-called strike option) and the floating rate (e.g. the average of fixes in a given month) multiplied by a notional volume of the commodity hedged. The seller will only pay this difference if the strike option is higher than the floating rate (or if the difference between the fixed and the floating rate is a positive number). The buyer of the option pays a premium for this hedging. This product serves to hedge the risks out of the given commodity price decrease. A commodity option is only offered to hedge the risks resulting out of, and connected with, a client’s commercial activities.
Product features
Variations of the product