Wish you a Happy & Risk-enabled 2014 ! 2013 was a year of significant turbulence and uncertainty. While Stricter Regulations pushed some investment banks to close down their commodity trading divisions (see JP Morgan, Deutsche Bank), excessive Volatility and poor returns saw some commodity hedge funds closing down. The 16 day US shut-down added significant […]
Commodity Risk Management beyond VaR First, the bad news – Value at Risk (VaR) of a position / portfolio just gives the maximum loss you can have, with a certain confidence. But it doesn’t tell you what your position / portfolio could lose beyond that confidence. If you are the one managing risks in your […]
The Future of Commodity Risk Management The Future of Commodity Risk Management. Here we share what we think how Commodity Risk Management is going to change in the Future for companies that today, either don’t have a well-established risk management process or are struggling with their processes. As we talk to industry experts and commodity […]
The evolution of Commodity Risk Management ! While maturity of Risk Management processes is good in Banking and Insurance industries which is closely followed by the Energy Trading industry, for Commodity Trading industry it is still in a relatively nascent stage. This is primarily due to delayed integration of commodity markets with the financial markets. […]
The Huge Cost of Poor Risk Management Many commodity trading / processing companies inadvertently end up relegating their Risk Management Function as just an obligatory process, unable to figure out how to measure its effectiveness on their bottom-line or margins. Many others invest in risk management by either developing their own in-house systems and processes, […]