This course examines the different risk profiles created in arbitrage transactions when the oil contracts have floating prices. It explains how traders manage the initial risk on these transactions and then how the hedges are adjusted as the physical cargoes price in/out.
After completion of this course you will understand:- the difference between fixed and floating priced arbitrage; how hedging can lock in any margin when cargoes have floating prices; how to choose the correct hedging instrument and then hedge at the appropriate time; when to unwind any hedges and the consequences of not doing so.
Approx. 45-60 mins