Agiboo tutorial 1.3
What are possible risks during a commodity trade, and can we do something about it? Yes, we can! In our Agiblocks tutorials, we would like to show you what you need to know when dealing with physical commodity contracts. You can read all about it here. Today we would like to share the latest addition in our video series: Agiblocks Tutorial 1.3 – Pricing and Fixed Contract Delivery.
Pricing and Fixed Contract Delivery
The third installment in our series is another episode on the subject of Delivery and Pricing, this time focusing on the pricing – or partial pricing – of a to be fixed contract delivery and its implications. Basically, there are two ways to go about pricing; you either (A) agree on a price with the other party, and hedge your risks with a future, or (B) directly price it with a futures contract. Don’t worry, we’ll cover everything about futures in a later episode. Here, we’ll focus on hedging as a way to limit risk, and how Agiblocks can help you do so.
The first example in tutorial 1.3 deals with a physical cocoa contract with two separate deliveries in different months. Interested in finding out how to go about that? Let’s go over it in the video below!