GFI Container Derivatives
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GFI CONTAINER DERIVATIVES MARKETS INTELLIGENCE ABOUT GFI FREIGHT GFI Freight provides brokerage services for more than 150 clients worldwide from dedicated derivatives desks in London, New Y ork, Shanghai, Singapore and Cape Town. In each of these major centres, our highly experienced brokers provide coverage for the world’s leading oil and shipping companies, as well as banks and financial institutions. GFI’s global synergies between its wet and dry FFA and physical freight desks and other commodity markets in which GFI operates (for example coal and iron ore) enables GFI to provide tailored hedging strategies by looking at total risk across a range of markets. Currently GFI is the market leader in both the wet and dry FFA market. By leveraging its skills and experience in these established freight derivatives market, GFI is in a strong position to offer clients insight into what is still a very unfamiliar area to some market participants, especially in the container market. GFI CONTAINER SWAPS TRADING GFI has been building liquidity and expertise in more than 90 markets, including freight, for over 20 years. GFI’s container brokerage desk offers shipping lines, freight forwarders, shippers, trading houses, and financial institutions the ability to hedge and manage freight rate exposure, especially as a risk management tool. In the less commoditised markets, especially the fledgling container derivatives market, brokers perform an invaluable role for their clients, using their position at the centre of information flow to source the best price through skilled liquidity aggregation and transaction execution. KEY BENEFITS OF PARTNERING WITH GFI FREIGHT • GFI Group is a l ea din g intermediary with an unmatched presence in global derivative markets, especially within freight. • Our f ocu s on a cl ient based formula, allows for greater depth of understanding of our client’s risk exposure profile, enabling us to tailor a suitable hedging strategy. • GFI’s skill s and ex perie nce in establishing existing freight derivatives markets puts us in a good position to help deliver to clients insight and information to what is still a very unfamiliar area for many market participants. • GFI hosts a numbe r of w orksho ps that help prospective clients become more familiar with the derivative products as a risk management tool. • Syner gies t hat ca n be ma ximis ed between GFI Freight and other commodity markets in which GFI operate. • Conti nued inv estme nt a nd development of research, trading and analytical technology. FREIGHT NO.1 WET FFA BROKER 2009 ENERGY RISK COMMODITY RANKINGS NO.1 DRY FFA BROKER 2008 ENERGY RISK COMMODITY RANKINGS NO.1 DRY FFA BROKER 2010 ASIA RISK COMMODI TY R ANKI NGS GFI is a leading provider of wholesale brokerage services and trading support products. It provides brokerag e services, market data, trading platform and analytics software products to clients for a range of fixed income, financial, equity, freight and commodity instruments.
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Container Derivatives
Transcript of GFI Container Derivatives
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GFI CONTAINER DERIVATIVES
MARKETS INTELLIGENCE
ABOUT GFI FREIGHT
GFI Freight provides brokerageservices for more than 150 clientsworldwide from dedicatedderivatives desks in London, NewYork, Shanghai, Singapore and CapeTown. In each of these majorcentres, our highly experiencedbrokers provide coverage for theworlds leading oil and shippingcompanies, as well as banks andfinancial institutions.
GFIs global synergies between itswet and dry FFA and physical freightdesks and other commoditymarkets in which GFI operates (forexample coal and iron ore) enablesGFI to provide tailored hedgingstrategies by looking at total riskacross a range of markets.
Currently GFI is the market leaderin both the wet and dry FFA market.By leveraging its skills andexperience in these establishedfreight derivatives market, GFI is ina strong position to offer clientsinsight into what is still a veryunfamiliar area to some marketparticipants, especially in thecontainer market.
GFI CONTAINER SWAPSTRADING
GFI has been building liquidity andexpertise in more than 90markets, including freight, for over20 years. GFIs containerbrokerage desk offers shippinglines, freight forwarders, shippers,trading houses, and financialinstitutions the ability to hedgeand manage freight rate exposure,especially as a risk managementtool.
In the less commoditised markets,especially the fledgling containerderivatives market, brokersperform an invaluable role for theirclients, using their position at thecentre of information flow tosource the best price throughskilled liquidity aggregation andtransaction execution.
KEY BENEFITS OF PARTNERINGWITH GFI FREIGHT
GFI Group is a leadingintermediary with an unmatchedpresence in global derivativemarkets, especially within freight.
Our focus on a client basedformula, allows for greater depth ofunderstanding of our clients riskexposure profile, enabling us totailor a suitable hedging strategy.
GFIs skills and experience inestablishing existing freightderivatives markets puts us in agood position to help deliver toclients insight and information towhat is still a very unfamiliar areafor many market participants.
GFI hosts a number of workshopsthat help prospective clientsbecome more familiar with thederivative products as a riskmanagement tool.
Synergies that can be maximisedbetween GFI Freight and othercommodity markets in which GFIoperate.
Continued investment anddevelopment of research, tradingand analytical technology.
FREIGHT
NO.1 WET FFA BROKER 2009ENERGY RISK COMMODITY RANKINGS
NO.1 DRY FFA BROKER 2008ENERGY RISK COMMODITY RANKINGS
NO.1 DRY FFA BROKER 2010ASIA RISK COMMODITY RANKINGS
GFI is a leading provider of wholesale brokerage services and trading support products. It providesbrokerage services, market data, trading platform and analytics software products to clients for a rangeof fixed income, financial, equity, freight and commodity instruments.
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FREIGHT
GFI Group Inc. 2010. All rights reserved.This advertisement has been approved by GFI Brokers Limited, which is regulated by the FSA in the UK.GFI Securities LLC, a FINRA and NFA regulated firm.
CONTACTS
CONTAINER DERIVATIVESLondon +44 20 7422 1180New York +1 212 968 2050Singapore +65 6820 [email protected]
ABOUT GFI
www.GFIgroup.com/freight
GFI Group Inc. (NYSE GFIG) is a leading provider of wholesalebrokerage, electronic execution and trading support products for globalfinancial markets. GFI Group Inc. provides brokerage services, marketdata, trading platform and analytics software products to institutionalclients in markets for a range of fixed income, financial, equity andcommodity instruments.
Headquartered in New York, GFI was founded in 1987 and employsmore than 1,800 people with additional offices in London, Paris, HongKong, Seoul, Tokyo, Singapore, Sydney, Cape Town, Santiago, Dubai,Dublin, Tel Aviv, Calgary, Los Angeles, Englewood (NJ) and Sugar Land(TX). GFI Group Inc. provides services and products to over 2,400institutional clients, including leading investment and commercial banks,corporations, insurance companies and hedge funds. Its brands includeGFISM, GFInet, CreditMatch, GFI ForexMatch, EnergyMatch, FENICS,Starsupply, Amerex, Trayport, and Kyte.
CONTAINER DERIVATIVES
A container derivative is acontract whose value is derivedfrom the value of an Underlyingagainst which it is settled.
The Underlying in this case is theShanghai Containerised FreightIndex (SCFI).
It is a form of a risk managementtool, giving businesses the abilityto hedge freight rate risk andflexibility to offer additionalclient services.
THE PRODUCT
Container Freight SwapAgreements (CFSA)
A CFSA is a forward dated swapin container freight rates by off-setting a physical position againsta paper position.
It is an agreement today to buyor sell a freight rate at a certainlevel (fixed rate) for a definedperiod in the future, which issettled at a future date at a pricebased on monthly average freightassessments (floating rate) takenfrom the SCFI during thesettlement period.
Currently available OTC (non-exchange traded) with clearingat LCH.Clearnet in London andSGX AsiaClear in Singapore.
Four principle routes that arebeing cleared include (all ex-Shanghai): Europe,Mediterranean, US West Coast,US East Coast.
Traded and cleared liketraditional Forward FreightAgreements (FFAs). Timecharter days and charter ratesare replaced by container unitsand box rates.
CFSAs are cash settled.
THE UNDERLYING
Shanghai Containerised FreightIndex (SCFI)
Officially launched in Oct 2009,the new SCFI is a weekly spotrate assessment of the Shanghaiexport container transportmarket, published andadministered by the ShanghaiShipping Exchange (SSE).
It is a comprehensive indexcalculated from the weightedaverage of 15 individual shippingroutes from Shanghai.
SCFI panel is comprised of 30volunteer panellists 15 carriersand 15 local freight forwarders.
Freight rate assessments are all-inrates, based on a general drycargo container rate, export CIF,CY-CY, expressed in USD/TEU orUSD/FEU (for US West Coast andEast Coast services only).
Published every Friday at 3pm,Beijing time.
Shanghai Shipping Exchange (SSE)
Established in 1996, it is a jointventure between the ChineseMinistry of Communications andthe Shanghai Authorities, whichprovides service and agencysupport, data and researchproducts and acts as the liaisonfor legal and legislative mattersbetween the shipping industry andthe Chinese government.
In addition to the SCFI, the SSEalso produces the ChinaContainer Freight Index (CCFI)and China Coastal Bulk FreightIndex (CBFI).
Originally, the CCFI and CBFIwere a by-product of legalrequirements to file freight rates.
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