Commodity traders can swap the volatility in prices by entering into structures from vanilla swaps to structured products.
Commodity swaps are products under which the client exchanges the floating rate for a fixed rate or vice versa. Most swaps are Asian swaps. However, a client can also trade bullet swaps based on their requirements. Commodity swaps are helpful for clients who are either producers or consumers of the relevant commodity and want to lock in their requirements for a fixed price.
Commodity options are similar to FX options, in which clients can buy or sell a call or put option. Since these are OTC traded products, we can provide bespoke solutions with clients able to enter structures with multiple options as per their requirements. These options are useful for clients who are looking to lock in certain best or worse case rates as per their requirements.
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