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Develop a Reliable Hedging StrategyFor NH3, Potash, and UAN
Develop a Reliable Hedging StrategyFor NH3, Potash, and UAN
Partnership Initiative Objective:
Our Hedging Strategy is made up of Three components
Our Hedging Strategy is made up of Three components
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
1. Timing Model for each market2. Bollinger Bands for each market3. Spread Ratio for each market
Following is a presentation of a hedging strategy that incorporateseach of these components for the markets of NH3, Potash, and UAN
NH3 Hedging Strategy (NH3HS):Is Comprised of
NH3 Forecasting Model (NH3FM) andNH3 Hedging Indicators (NH3HI)
NH3 Hedging Strategy (NH3HS)Is Comprised of:
NH3 Forecasting Model (NH3FM) and NH3 Hedging Indicators (NH3HI)
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
NH3 Hedging Strategy
NH3 Hedging IndicatorsNH3 Hedging IndicatorsBlue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Bollinger Bandsand
NH3/Crude Oil Spread Ratio
Bollinger Bandsand
NH3/Crude Oil Spread Ratio
NH3 Correlation with Crude Oil 1995-2009NH3 Correlation with Crude Oil 1995-2009
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Building the Hedging Model: Stage 1 Building the Hedging Model: Stage 1
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Create the Forecasting Model for NH3Create the Forecasting Model for NH3
NH3 Forecasting Model (NH3FM) NH3 Forecasting Model (NH3FM)
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Blue Apple TrendsA breakthrough in trading technology
The Forecasting model combines Four intermediate-term cycle lengths to
Determine Buy and Sell dates
The Forecasting model combines Four intermediate-term cycle lengths to
Determine Buy and Sell dates
Create the Hedging Strategy: Stage 2 Create the Hedging Strategy: Stage 2
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Blue Apple TrendsA breakthrough in trading technology
Combine the NH3 Forecasting Model (NH3FM) with Bollinger Bands
Combine the NH3 Forecasting Model (NH3FM) with Bollinger Bands
NH3 Forecasting Model with Bollinger BandsNH3 Forecasting Model with Bollinger Bands
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What do we use to Hedge NH3? What do we use to Hedge NH3?
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
The NH3 Hedging Strategy tells us WHEN to hedge.
But WHICH markets do we use?
A market or some combination of markets that are MOST correlated to NH3:
At this time, the market that works the best isCrude Oil
The NH3 Hedging Strategy tells us WHEN to hedge.
But WHICH markets do we use?
A market or some combination of markets that are MOST correlated to NH3:
At this time, the market that works the best isCrude Oil
Create the Hedging Strategy: Stage 3 Create the Hedging Strategy: Stage 3
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Combine the NH3 Forecasting Model (NH3FM) with Bollinger Bands
and NH3/Crude Oil Spread Ratio
Combine the NH3 Forecasting Model (NH3FM) with Bollinger Bands
and NH3/Crude Oil Spread Ratio
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NH3 Hedging Model Graph 2002-2009NH3 Hedging Model Graph 2002-2009
Best Correlation of NH3 to Other Markets Best Correlation of NH3 to Other Markets
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Crude Oil 86%Diesel 82%
Crude Oil 86%Diesel 82%
Correlation of NH3, UAN, Urea and Potash with Crude OilCorrelation of NH3, UAN, Urea and Potash with Crude Oil
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Correlation between Phosphates and US Treasury BondsCorrelation between Phosphates and US Treasury Bonds
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Potash Hedging Strategy (PHS)
Combines Potash Forecasting Model (PFM) andPotash Hedging Indicators (PHI)
Potash Hedging Strategy (PHS)
Combines Potash Forecasting Model (PFM) and Potash Hedging Indicators (PHI)
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Potash Hedging Strategy
Potash Hedging Indicators Potash Hedging Indicators
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Bollinger Bands
Potash/Treasury Bonds Spread Ratio
Potash Futures
Bollinger Bands
Potash/Treasury Bonds Spread Ratio
Potash Futures
Create the Hedging Strategy for Potash Create the Hedging Strategy for Potash
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Blue Apple TrendsA breakthrough in trading technology
Combine the Potash Forecasting Model (PFM) with Bollinger Bands and
Potash/Treasury Bonds Spread Ratio
Combine the Potash Forecasting Model (PFM) with Bollinger Bands and
Potash/Treasury Bonds Spread Ratio
What do we use to Hedge Potash? What do we use to Hedge Potash?
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Blue Apple TrendsA breakthrough in trading technology
The Potash Hedging Strategy tells us WHEN to hedge.
But WHICH markets do we use?
A market or some combination of markets that are MOST correlated to Potash:
At this time, the market that works the best is30-Year Treasury Bonds
The Potash Hedging Strategy tells us WHEN to hedge.
But WHICH markets do we use?
A market or some combination of markets that are MOST correlated to Potash:
At this time, the market that works the best is30-Year Treasury Bonds
Best Correlation of Potash to Other Markets Best Correlation of Potash to Other Markets
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Crude Oil 65%30-Year Treasury Bonds 70%
Crude Oil 65%30-Year Treasury Bonds 70%
Correlations between Potash and 30-Year US Treasury BondsCorrelations between Potash and 30-Year US Treasury Bonds
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UAN Hedging Strategy (UANHS)
Combines UAN Forecasting Model (UANFM) andUAN Hedging Indicators (UANHI)
UAN Hedging Strategy (UANHS)
Combines UAN Forecasting Model (UANFM) and UAN Hedging Indicators (UANHI)
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
UAN Hedging Strategy
UAN Hedging Indicators UAN Hedging Indicators
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Bollinger Bands
UAN/Crude Oil Spread Ratio
Bollinger Bands
UAN/Crude Oil Spread Ratio
Create the Hedging Strategy for UAN Create the Hedging Strategy for UAN
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Combine the UAN Forecasting Model (UANFM) with Bollinger Bands and
UAN/Crude Oil Spread Ratio
Combine the UAN Forecasting Model (UANFM) with Bollinger Bands and
UAN/Crude Oil Spread Ratio
What do we use to Hedge UAN? What do we use to Hedge UAN?
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
The UAN Hedging Strategy tells us WHEN to hedge.
But WHICH markets do we use?
A market or some combination of markets that are MOST correlated to UAN:
At this time, the market that works the best isCrude Oil
The UAN Hedging Strategy tells us WHEN to hedge.
But WHICH markets do we use?
A market or some combination of markets that are MOST correlated to UAN:
At this time, the market that works the best isCrude Oil
Best Correlation of UAN to Other Markets Best Correlation of UAN to Other Markets
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Crude Oil 88%Diesel 85%
Crude Oil 88%Diesel 85%
UAN Forecasting Plus Bollinger BandsUAN Forecasting Plus Bollinger Bands
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Urea Hedging Strategy (UHS)
Combines Urea Forecasting Model (UFM) andUrea Hedging Indicators (UHI)
Urea Hedging Strategy (UHS)
Combines Urea Forecasting Model (UFM) and Urea Hedging Indicators (UHI)
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Urea Hedging Strategy
Urea Hedging IndicatorsUrea Hedging Indicators
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Bollinger Bands
Urea/Crude Oil Spread Ratio
Bollinger Bands
Urea/Crude Oil Spread Ratio
Create the Hedging Strategy for Urea Create the Hedging Strategy for Urea
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Combine the Urea Forecasting Model (UFM) with Bollinger Bands and
Urea/Crude Oil Spread Ratio
Combine the Urea Forecasting Model (UFM) with Bollinger Bands and
Urea/Crude Oil Spread Ratio
What do we use to Hedge Urea? What do we use to Hedge Urea?
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
The Urea Hedging Strategy tells us WHEN to hedge.
But WHICH markets do we use?
A market or some combination of markets that are MOST correlated to Urea:
At this time, the market that works the best isCrude Oil
The Urea Hedging Strategy tells us WHEN to hedge.
But WHICH markets do we use?
A market or some combination of markets that are MOST correlated to Urea:
At this time, the market that works the best isCrude Oil
Best Correlation of Urea to Other Markets Best Correlation of Urea to Other Markets
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Crude Oil 91%Diesel 89%
Crude Oil 91%Diesel 89%
Nitrates Hedging Strategy (NHS)
Combines Nitrates Forecasting Model (NFM) andNitrates Hedging Indicators (NHI)
Nitrates Hedging Strategy (NHS)
Combines Nitrates Forecasting Model (NFM) and Nitrates Hedging Indicators (NHI)
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Nitrates Hedging Strategy
Nitrates Hedging Indicators Nitrates Hedging Indicators
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Bollinger Bands
Nitrates/Crude Oil Spread Ratio
Bollinger Bands
Nitrates/Crude Oil Spread Ratio
Create the Hedging Strategy for Nitrates Create the Hedging Strategy for Nitrates
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Combine the Nitrates Forecasting Model (NFM) with Bollinger Bands and
Nitrates/Crude Oil Spread Ratio
Combine the Nitrates Forecasting Model (NFM) with Bollinger Bands and
Nitrates/Crude Oil Spread Ratio
Nitrates Forecasting Model with Bollinger BandsNitrates Forecasting Model with Bollinger Bands
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What do we use to Hedge Nitrates? What do we use to Hedge Nitrates?
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
The Nitrates Hedging Strategy tells us WHEN to hedge.
But WHICH markets do we use?
A market or some combination of markets that are MOST correlated to Nitrates:
At this time, the market that works the best isCrude Oil
The Nitrates Hedging Strategy tells us WHEN to hedge.
But WHICH markets do we use?
A market or some combination of markets that are MOST correlated to Nitrates:
At this time, the market that works the best isCrude Oil
Best Correlation of Nitrates to Other Markets Best Correlation of Nitrates to Other Markets
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
Crude Oil 94%Diesel 89%
Crude Oil 94%Diesel 89%
Next Steps
Blue Apple TrendsA breakthrough in trading technology
Blue Apple TrendsA breakthrough in trading technology
1. Consult with your company on risk tolerance issues
1. Determine whether to hedge with futures or options
1. Establish role of Blue Apple in ongoing hedging process
1. Analyze next markets for hedging strategy
1. Create a partnership between your company and Blue Apple to increase profitability of your companies trading operations
1. Consult with your company on risk tolerance issues
1. Determine whether to hedge with futures or options
1. Establish role of Blue Apple in ongoing hedging process
1. Analyze next markets for hedging strategy
1. Create a partnership between your company and Blue Apple to increase profitability of your companies trading operations
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