- Freight derivative
Freight derivatives, which includes Forward Freight Agreement (FFA) and options based on these, are
financial instruments for trading in future levels of freightrates, for dry bulk carriers and tankers. These instruments are settled against various freight rate indices published by the Baltic Exchange (for Dry and some Wet contract) & Platt's (some Wet contracts.) FFAs are often traded over-the-counter (through brokers such as ICAPHYDE, Clarkson's Securities, SSY- Simpson, Spence and Young, FIS -Freight Investor Services, GFI, BRS & Tradition-Platou), but screen-based trading is becoming more popular, through various screens. Trades can be given up for clearing by the broker to one of the clearing houses that support such trades. There are three clearing houses for freight: NOS Clearing, LCH.Clearnet & SGX (Singapore). Freight derivatives are primarily used by shipowners and operators, oil companies, trading companies and grain houses as tools for managing freight rate risk. Recently with Commodities now standing at the forefront of international economics; the large financial trading house, including banks and hedge funds have entered the market.
Dry Freight or Dry-Bulk FFAs
The Baltic Exchange,
Baltic Dry Indexwhich measures the cost for shipping goods like iron ore and grains, doubled over the past 12 months and has risen more than fourfold since 2006.
The trading volume of dry freight derivatives, a market estimated to be worth about $200 billion in 2007, grew as those needing ships attempted to contain their risks and investment banks and hedge funds looked to make profits from speculating on price movements. At the close of the 2007 financial year, the number of traded lots on dry FFAs doubled the derived physical product.
* [http://www.olympicvessels.com/derivatives.php Freight Derivatives explained]
* [http://www.clarksonsecurities.com/products.aspx Clarkson's Securities Limited: Freight Forward Agreements]
* [http://www.ssyonline.com/Services/Freight_Futures/index.html?PHPSESSID=b921922695f23e1e57954b7420682485 Simpson, Spence & Young Shipbrokers: Freight Forward Agreements]
* [http://www.freightinvestorservices.com/ffas Freight Investor Services: Freight Forward Agreements (FFAs)]
Wikimedia Foundation. 2010.
Look at other dictionaries:
Derivative (finance) — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond … Wikipedia
Container Freight Swap Agreement — Container Freight Swap Agreements are a financial futures contract that allow for hedging and speculating against the volatility of seaborne, intermodal container box rates.  A container freight swap agreement most commonly takes the form of a … Wikipedia
2-8-2 — In the Whyte notation, a 2 8 2 is a railroad steam locomotive that has one leading axle followed by four powered driving axles and one trailing axle. This configuration of steam locomotive is most often referred to as a Mikadocite web|… … Wikipedia
McDonnell Douglas MD-11 — MD 11 A FedEx Express MD 11F Role Wide body jet airliner … Wikipedia
DBAG Class 128 — AEG/Adtranz/Bombardier 12X 128 001 in UNICEF special livery in 1996. Power type Electric Builder AEG Schienenfahrzeuge Serial number … Wikipedia
United States — a republic in the N Western Hemisphere comprising 48 conterminous states, the District of Columbia, and Alaska in North America, and Hawaii in the N Pacific. 267,954,767; conterminous United States, 3,022,387 sq. mi. (7,827,982 sq. km); with… … Universalium
railroad — /rayl rohd /, n. 1. a permanent road laid with rails, commonly in one or more pairs of continuous lines forming a track or tracks, on which locomotives and cars are run for the transportation of passengers, freight, and mail. 2. an entire system… … Universalium
Boeing 747 — British Airways Bo … Wikipedia
Handley Page Dart Herald — HPR.7 Dart Herald Handley Page HPR 7 Herald 214 of Brymon Airways in 1980 Role Airliner Man … Wikipedia
LDV Pilot — 1999 2.2T Pilot Manufacturer LDV Limited Production 1997–2006 Predecessor Leyland DAF 200 Series … Wikipedia