Risk Management Services
Are you a commodity producer, commodity processor, elevator, or commodity trader? Do you face problems with input / output price volatility that affects your net cash flow? Do you want to secure your future profit margin now? We can assist you in optimizing your market position by hedging your price risk with futures contracts and options.
We develop hedging strategies for:
- Single commodity exposure
- Multi-product hedging projects (margin or profit risk management)
Single commodity exposure
FS-Innovators uses its Covar Model™ that is embedded in FSI Hedging Software™ to provide optimal hedging strategies by determining the optimal Hedge Ratios and Hedging Effectiveness for your desired position.
The model identifies and quantifies residual risk, natural hedge, and can be used to increase shareholder value by optimizing your company’s risk return trade-off. Based on internal input / output relationships, the model provides the optimal combination of risk management instruments to ensure the most profitable risk-return profile.
FS-Innovators can help your company to cope with risk on commodities where no futures contract exists by performing analysis on cross hedge possibilities; i.e. use a related futures contracts to hedge risk in another commodity.
Multi product hedging projects
Do you want to improve the performance of your company’s portfolio in terms of risk volatility and returns in the long run? We can do so by using multi-product hedging. In doing so, we can identify the relationships between the inputs (purchase prices), outputs (sales prices) and commodity production by-products and defines these relationships in terms of dynamic (time-varying) co-variances.
Strategic Management Consulting
FS-Innovators consults company management teams and boards of directors to evaluate current operations strategy as well as designing possible future strategies by facilitating the team decision making processes.