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Energy Derivative
An energy derivative is a derivative contract based on (derived from) an underlying energy asset, such as natural gas, crude oil, or electricity. Energy derivatives are exotic derivatives and include exchange-traded contracts such as futures and options, and over-the-counter (i.e., privately negotiated) derivatives such as forwards, swaps and options. Major players in the energy derivative markets include major trading houses, oil companies, utilities, and financial institutions. Energy derivatives were criticized after the 2008 financial crisis, with critics pointing out that the market artificially inflates the price of oil and other energy providers. Definition The basic building blocks for all derivative contracts are futures contracts and swaps contracts. In energy markets, these are traded on the New York Mercantile Exchange NYMEX, in Tokyo TOCOM and online through the IntercontinentalExchange. Futures contracts A futures contract is an agreement to buy or sell a c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Derivative Contract
In finance, a derivative is a contract that ''derives'' its value from the performance of an underlying entity. This underlying entity can be an asset, Index fund, index, or interest rate, and is often simply called the "underlying". Derivatives can be used for a number of purposes, including insuring against price movements (Hedge (finance)#Etymology, hedging), increasing exposure to price movements for speculation, or getting access to otherwise hard-to-trade assets or markets. Some of the more common derivatives include Forward contract, forwards, Futures contract, futures, Option (finance), options, Swap (finance), swaps, and variations of these such as synthetic collateralized debt obligations and credit default swaps. Most derivatives are traded over-the-counter (finance), over-the-counter (off-exchange) or on an exchange such as the Chicago Mercantile Exchange, while most insurance contracts have developed into a separate industry. In the United States, after the financia ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Settlement (finance)
Settlement is the "final step in the transfer of ownership involving the physical exchange of securities or payment". After settlement, the obligations of all the parties have been discharged and the transaction is considered complete. In the context of securities, settlement involves their delivery to the beneficiary, usually against ( in simultaneous exchange for) payment of money, to fulfill contractual obligations, such as those arising under securities trades. Nowadays, settlement typically takes place in a central securities depository. In the United States, the settlement date for marketable stocks is usually 2 business days or T+2 after the trade is executed, and for listed options and government securities it is usually 1 day after the execution. In Europe, settlement date has also been adopted as 2 business days after the trade is executed. As part of performance on the delivery obligations entailed by the trade, settlement involves the delivery of securities and the cor ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fuel Price Risk Management
Fuel price risk management, a specialization of both financial risk management and oil price analysis and similar to conventional risk management practice, is a continual cyclic process that includes risk assessment, risk decision making and the implementation of risk controls. It focuses primarily on when and how an organization can best hedge against exposure to fuel price volatility. It is generally referred to as "bunker hedging" in marine and shipping contexts and "fuel hedging" in aviation and trucking contexts. Providers of fuel price risk management services Fuel price risk management services are predominantly provided by specialist teams within fuel management companies, oil companies, financial institutions, utilities and trading companies. Examples include: :Fuel management companies – Mercatus Energy Advisors, INTL FCStone, World Fuel Services, Onyx Capital Advisory, Global Risk Management :Oil companies – Total S.A., Royal Dutch Shell, ExxonMobil, Koch Indust ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Jet Fuel
Jet fuel or aviation turbine fuel (ATF, also abbreviated avtur) is a type of aviation fuel designed for use in aircraft powered by gas-turbine engines. It is colorless to straw-colored in appearance. The most commonly used fuels for commercial aviation are Jet A and Jet A-1, which are produced to a standardized international specification. The only other jet fuel commonly used in civilian turbine-engine powered aviation is Jet B, which is used for its enhanced cold-weather performance. Jet fuel is a mixture of a variety of hydrocarbons. Because the exact composition of jet fuel varies widely based on petroleum source, it is impossible to define jet fuel as a ratio of specific hydrocarbons. Jet fuel is therefore defined as a performance specification rather than a chemical compound. Furthermore, the range of molecular mass between hydrocarbons (or different carbon numbers) is defined by the requirements for the product, such as the freezing point or smoke point. Kerosene-type jet ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Airline Company
An airline is a company that provides air transport services for traveling passengers and freight. Airlines use aircraft to supply these services and may form partnerships or alliances with other airlines for codeshare agreements, in which they both offer and operate the same flight. Generally, airline companies are recognized with an air operating certificate or license issued by a governmental aviation body. Airlines may be scheduled or charter operators. The first airline was the German airship company DELAG, founded on November 16, 1909. The four oldest non-airship airlines that still exist are the Netherlands' KLM (1919), Colombia's Avianca (1919), Australia's Qantas (1920) and the Czech Republic's Czech Airlines (1923). Airline ownership has seen a shift from mostly personal ownership until the 1930s to government-ownership of major airlines from the 1940s to 1980s and back to large-scale privatization following the mid-1980s. Since the 1980s, there has also been a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Diversification (finance)
In finance, diversification is the process of allocating capital in a way that reduces the exposure to any one particular asset or risk. A common path towards diversification is to reduce risk or volatility by investing in a variety of assets. If asset prices do not change in perfect synchrony, a diversified portfolio will have less variance than the weighted average variance of its constituent assets, and often less volatility than the least volatile of its constituents. Diversification is one of two general techniques for reducing investment risk. The other is hedging. Examples The simplest example of diversification is provided by the proverb "Don't put all your eggs in one basket". Dropping the basket will break all the eggs. Placing each egg in a different basket is more diversified. There is more risk of losing one egg, but less risk of losing all of them. On the other hand, having a lot of baskets may increase costs. In finance, an example of an undiversified portfoli ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Speculation
In finance, speculation is the purchase of an asset (a commodity, good (economics), goods, or real estate) with the hope that it will become more valuable shortly. (It can also refer to short sales in which the speculator hopes for a decline in value.) Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements. In principle, speculation can involve any tradable good or financial instrument. Speculators are particularly common in the markets for stocks, bond (finance), bonds, commodity futures, currency, currencies, fine art, collectibles, real estate, and derivative (finance), derivatives. Speculators play one of four primary roles in financial markets, along with hedge (finance), hedgers, who engage in transactions to offset some other pre-existing risk, arbitrageus who seek to profit from situations where Fungibility, fungible instruments trade at different prices in different market segments, and investors who s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Hedge (finance)
A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insurance, forward contracts, swaps, options, gambles, many types of over-the-counter and derivative products, and futures contracts. Public futures markets were established in the 19th century to allow transparent, standardized, and efficient hedging of agricultural commodity prices; they have since expanded to include futures contracts for hedging the values of energy, precious metals, foreign currency, and interest rate fluctuations. Etymology Hedging is the practice of taking a position in one market to offset and balance against the risk adopted by assuming a position in a contrary or opposing market or investment. The word hedge is from Old English ''hecg'', originally any fence, living or artificial. The first known use of the word ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
International Petroleum Exchange
International is an adjective (also used as a noun) meaning "between nations". International may also refer to: Music Albums * ''International'' (Kevin Michael album), 2011 * ''International'' (New Order album), 2002 * ''International'' (The Three Degrees album), 1975 *''International'', 2018 album by L'Algérino Songs * The Internationale, the left-wing anthem * "International" (Chase & Status song), 2014 * "International", by Adventures in Stereo from ''Monomania'', 2000 * "International", by Brass Construction from ''Renegades'', 1984 * "International", by Thomas Leer from ''The Scale of Ten'', 1985 * "International", by Kevin Michael from ''International'' (Kevin Michael album), 2011 * "International", by McGuinness Flint from ''McGuinness Flint'', 1970 * "International", by Orchestral Manoeuvres in the Dark from '' Dazzle Ships'', 1983 * "International (Serious)", by Estelle from '' All of Me'', 2012 Politics * Political international, any transnational organization of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Brent Crude
Brent Crude may refer to any or all of the components of the Brent Complex, a physically and financially traded oil market based around the North Sea of Northwest Europe; colloquially, Brent Crude usually refers to the price of the ICE (Intercontinental Exchange) Brent Crude Oil futures contract or the contract itself. The original Brent Crude referred to a trading classification of sweet light crude oil first extracted from the Brent oilfield in the North Sea in 1976. As production from the Brent oilfield declined to zero in 2021, crude oil blends from other oil fields have been added to the trade classification. The current Brent blend consists of crude oil produced from the Forties (added 2002), Oseberg (added 2002), Ekofisk (added 2007), and Troll (added 2018) oil fields (also known as the BFOET Quotation). The Brent Crude oil marker is also known as Brent Blend, London Brent and Brent petroleum. This grade is described as light because of its relatively low density, and ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
1970s Energy Crisis
The 1970s energy crisis occurred when the Western world, particularly the United States, Canada, Western Europe, Australia, and New Zealand, faced substantial petroleum shortages as well as elevated prices. The two worst crises of this period were the 1973 oil crisis and the 1979 energy crisis, when, respectively, the Yom Kippur War and the Iranian Revolution triggered interruptions in Middle Eastern oil exports. The crisis began to unfold as petroleum production in the United States and some other parts of the world peaked in the late 1960s and early 1970s. World oil production per capita began a long-term decline after 1979. The oil crises prompted the first shift towards energy-saving (particular, fossil fuel-saving) technologies. The major industrial centers of the world were forced to contend with escalating issues related to petroleum supply. Western countries relied on the resources of countries in the Middle East and other parts of the world. The crisis led to stagnant e ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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