Instrument Types

An agreement to buy or sell a commodity at a fixed price for a future delivery or pricing date.

• Used to lock in exposure to agricultural, energy, or metals prices.
• Valuation is driven by forward curves, settlement conventions, and contract terms.

A contract exchanging a fixed commodity price against floating market prices over one or more pricing periods.

• Used to hedge recurring commodity purchases, sales, or inventory exposure.
• Valuation depends on forward curves, fixing schedules, and accrued observations.

A standard call or put option on a commodity reference price.

• Used to protect against adverse commodity moves while keeping participation in favorable moves.
• Valuation uses the forward price, strike, expiry, volatility, and discounting.

An option whose payoff is based on the average commodity price observed over a pricing window.

• Common for physical commodity contracts priced against monthly or periodic averages.
• Valuation depends on observed fixings, remaining forward prices, and volatility.

A commodity option whose rights depend on whether the market reaches a defined barrier level.

• Used to target protection around specific commodity price thresholds.
• Valuation is sensitive to the barrier, monitoring rules, volatility, and forward curve shape.

An option on the spread between two commodity prices, locations, grades, or delivery periods.

• Used for crack spreads, calendar spreads, quality spreads, or location basis risk.
• Valuation depends on both forward curves, volatility, and correlation.

A flexible commodity option allowing multiple exercise or nomination decisions within contractual limits.

• Common for energy and supply contracts with volume flexibility.
• Valuation depends on exercise constraints, remaining optionality, curves, and volatility.

An option whose payoff compares a strike with the average commodity price over an observation period.

• Used when commercial exposure is settled against an average market price.
• Valuation combines known fixings, projected prices, volatility, and discounting.

An agreement to exchange two currencies at a fixed rate on a future settlement date.

• Used to hedge or express exposure to an exchange rate.
• Valuation is driven by spot FX, interest rate curves, and the contract forward rate.

A pair of linked FX exchanges with different settlement dates, usually a near leg and a far leg.

• Used for rolling currency funding or hedging cash flows.
• Valuation depends on spot FX, forward points, and the two leg rates.

A cash-settled FX forward where the profit and loss is paid in a settlement currency instead of exchanging both currencies.

• Common for restricted or non-deliverable currencies.
• Valuation compares the contracted forward rate with the expected fixing rate.

A European call or put option giving the right, but not the obligation, to exchange currencies at a strike rate on the expiry date only.

• Used to keep upside participation while limiting downside risk.
• Valuation uses FX forwards, quote-currency discounting, expiry, strike, and volatility.

An American call or put option giving the right, but not the obligation, to exchange currencies at a strike rate at any time up to the maturity date.

• Used to keep upside participation while allowing early exercise.
• Valuation uses FX spot, FX forwards, quote-currency discounting, maturity, strike, and volatility.

An option whose payoff depends on the average FX rate observed over a defined fixing period.

• Useful when exposure is accumulated over time.
• Valuation depends on the averaging schedule, observed fixings, and forward volatility.

An FX option that becomes active or inactive when the currency pair reaches a predefined barrier level.

• Used to tailor protection around specific market levels.
• Valuation is sensitive to spot FX, volatility, barrier level, and monitoring rules.

An option whose payoff is based on the spread or relative move between two FX references.

• Used for relative-value exposure between currencies or currency baskets.
• Valuation depends on both references, their volatilities, and correlation.

An option structure that allows several exercise decisions within defined contractual limits.

• Useful for flexible hedging when timing and quantity are uncertain.
• Valuation depends on exercise rules, remaining rights, market curves, and volatility.

An option whose payoff references the difference between a strike and the average FX price over an observation period.

• Designed for exposures priced against an average rate.
• Valuation combines observed fixings, remaining forward rates, and volatility.