Issues for discussion:
• Introduction to derivatives:
– Derivatives as a price risk management tool in international trade
– What is hedging and what it is not – basic principles
– The difference between operational and strategic hedging
• The trader’s view:
– As a shipowner
– As a charterer / commodity trader
– As a producer and end user
• Master netting and collateralisation agreements as a critical contractual risk management tool.
• The relationship between derivatives and defaults under commodity sale contracts and charterparties:
– How a single breach e.g., an off-spec cargo or a late ship, can close an entire derivatives trading book
– Recoverability of hedging / derivatives trading losses in:
– Commodity sale contracts disputes
– Charterparty disputes