Commodity Derivatives Introduction

In this pathway, Emma introduces us to commodity derivatives, why they are needed, the mechanism that it utilises and the ways in which they can be applied.

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3 videos •

  • Introduction to Commodity Derivatives

    This video series will examine the relationship between commodity prices and their supply and demand conditions. In this video, Emma discusses how changes in the demand-supply balance affect the price of a commodity.


  • Commodity Derivative Settlement

    In this video, Emma explains us the two settlement mechanisms for commodity derivatives, "physical-settlement" and "cash-settlement".  She also examines how well the price of a commonly traded commodity derivative, the commodity forward, converges to the price of the underlying commodity under each settlement mechanism.


  • Application of Commodity Derivatives

    When there is good price convergence between a commodity derivative and the underlying physical, then the derivative is an excellent proxy for the underlying. In this video, Emma explains us how companies and investors deploy commodity forwards in their businesses.


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