Commodity Derivatives – Markets and Applications, Second Edition

The essential guide to commodity markets, mechanisms, drivers of price and the associated derivatives

Commodity Derivatives is a complete and accessible reference for anyone studying or working with commodities. By examining commodities individually in the context of their own unique market structures, you′ll gain a deeper understanding of the many factors and mechanisms at work; patterns of supply and demand, price fluctuations and products are discussed in detail, along with main market risks and hedging along the supply chain. This new second edition features new and expanded coverage of OIS valuation, spread options, options smiles and skews, theories of price formation, project finance, climate change, emissions trading, agricultural markets, index structures and much more.

Primarily focused on over–the–counter structures, this book provides detailed coverage of both hard and soft commodities. Supply chain risk and hedging is followed by exposure and hedging in structuring banks, followed by an in–depth look at wholesale OTC investment structures. Working with commodities and derivatives requires a clear grasp of the mechanisms at work and the forces driving them and this book provides invaluable reference for the modern markets.

Delve into the physical markets, supply and demand patterns and factors that influence price for individual commodities
Learn how each product is used along the supply chain, identify risks and learn how they can be hedged
Examine new or expanded coverage of gold, steel, iron–ore, refined crude products and more
Develop a deeper understanding of commodity markets, derivatives and their applications

Commodities and their associated derivatives are one of the financial markets′ major foundations; the derivatives market is estimated at $1.2 quadrillion. To work within this space effectively, you need an essential understanding of the markets, their movements and their drivers; Commodity Derivatives provides a comprehensive reference for the field.