Topic summary
Freight derivative
Extracted from the Wikipedia article Shipping markets.
Freight derivatives
Freight derivatives, which include forward freight agreements (FFA), container freight swap agreements, container freight derivatives, physical-deliverable freight derivatives, and options based on these, are financial instruments for trading in future levels of freight rates for dry bulk carriers, tankers and containerships. These instruments are settled against various freight rate indices published by the Baltic Exchange (for Dry and most Wet contracts), Shanghai Shipping Exchange (International and domestic Dry Bulk, and International Containers), and Platt's (Asian Wet contracts), or physical delivered through Shanghai Shipping Freight Exchange.