On-Demand Commodity Hedging & Physical Trading Training.

Welcome to Perfectly Hedged. This course will walk you through the many concepts of hedging and how they are applied to your day-to-day work.

At its core, hedging is not a trading strategy; it is a risk mitigation system. It is used by companies up and down the supply chain as a method to reduce or even eliminate exposure to changes in the price of the commodity they are producing, consuming, or trading.

Uncover how metal prices are actually determined and the exchanges that base metals trade on. While it is not a pre-requisite to know the ins and outs of how exchanges function, having some base level knowledge of the exchanges you trade on will enhance your understanding of why and how metals trade the way they do. And why hedging is so important to the long term profitability of commodity companies.

Discover the core purpose of hedging: risk mitigation. Learn the nuances between hedging concentrates, scrap, and refined metals—critical knowledge to avoid costly mistakes. Plus, uncover how traders profit, even when hedging eliminates gains from price movements.

See how companies navigate the basis risk hedging creates from the difference between contract volumes and futures lot sizes, and the constant need to manage this exposure.

Explore a concept that is equally as important as outright hedge execution - position management. Too often people think that their impacts on hedging stop after a contract is initially priced. Here we will go through the importance of managing those hedge positions and what different events can influence those moves.

Better understand your physical shipments and what impacts the changes to those physical shipments can have on hedging.

Explore the various ways that middle office staff can have a direct impact on the profitability of a trade, simply by being aware of the impacts that the actions they are likely already taking have on hedging.

Hedging errors are part of everyone’s experience in their work, but given the potential for losses that hedging errors in particular can cause, there are certain practices we can follow to try and mitigate those risks.

Take a look at a commonly misunderstood part of hedging, counterparty hedge exposure. While this risk can be easy to overlook, it can also be the cause of some severe losses if not well managed.

Learn about warrants and the exchange warehouse system. Given the far reaching influence the warrant market has on each metal, even if you are not actively trading warrants this knowledge is vital to fully understanding the metals you are working with.

Understand arbitrage - what it is, how it is utilized in hedging, and how it is integrated into physical contracts.

Learn about the world of premium hedging via the use of premium swap contracts on the CME.

Dive into the concept of foreign exchange hedging. The need to understand foreign exchange exposures and how to hedge those risks is vitally important regardless of the commodity you handle.

Familiarize yourself with the Shanghai Futures Exchange, more commonly known as the SHFE and the metals that trade on it. China can be somewhat of a black box when it comes to information - navigating these markets without having experienced people guide you is not advised.

Discover the world of options and how they are used from a hedging perspective in physical commodities. These are simple option strategies traders can use if they want to gain some exposure to the price of a commodity, whether that’s because of a view on the market, or certain terms that can be built into physical contracts that allow for options contracts to be utilized.

Understand the essential role commodity traders play in global markets. This lesson explores why markets need traders and how they create value on both ends of the commodity supply chain.

Familiarize yourself with the rules that govern global trade. Here we break down Incoterms, clarifying responsibilities, costs, and risk between buyer and seller.

Explore how and why companies assess, approve, and monitor their trading partners. Here we look at credit risk, compliance checks, and operational considerations that help to safeguard commodity firms.

Warehouses offer more than just a storage solution - learn how to fully utilize this essential part of the commodity supply chain. Discover how traders manage evolving customs procedures and utilize Foreign Trade Zones to their benefit.

Learn the most common ways trading companies finance material, key differences between them, and understand the different title documents that make trade finance possible.

Get a comprehensive overview of the transportation modes used in commodity trading, from bulk cargoes and container vessels to trucks and rail. We unpack how timing, procedure, and cost impact margins and risk.

Understand how to value open positions and assess daily P&L. This lesson explains mark-to-market concepts across physical, and derivative positions, and how your actions have a direct impact.

Discover the key functions within a commodity trading firm and learn how they interact with each other. Departments like finance, operations, risk, treasury, and more that enable trades to be structured, executed, and settled efficiently and profitably.

Explore the two dominant schools of market analysis. We break down how traders use supply/demand fundamentals and price behavior to inform their trading strategies.