A Beginner's Guide to Crude Oil Options - Part I - Strike Price
We're often asked to explain what determines the price of crude oil (as well as bunker fuel, diesel fuel, gasoil, gasoline and jet fuel) options....
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Does Hedging with Costless Collars Present Additional Basis Risk?
Over the past couple years we have addressed various aspects of both basis risk and costless collars however, until now, we have not addressed the...
Costless Collars - Energy Hedging Friend or Foe?
As has been the case many times in the past and certainly will be many times in the future, the debate regarding the advantages and disadvantages of...
Can Your Hedging Strategies Tolerate Significantly Lower Oil Prices?
Are oil prices poised to collapse again, as they did in 2008? We don't claim to know the answer to such a question as doing so would require us to...
Three Strategies for Dealing with Rising Fuel Costs
Join Mercatus Energy Advisors and Allegro, Tuesday April 23, 2013 at 9:00 AM CT, for a 30 minute live webinar to learn about three strategies for...
A Conservative Hedging Strategy for Natural Gas Consumers
Over the course of the past year, the price of prompt month NYMEX natural gas futures have doubled since bottoming just below $2/MMBtu. The reasons...
How to Reduce Basis Risk by Hedging with Options - Part II
A few weeks ago, in a post titled How to Reduce Basis Risk by Hedging with Options - Part I, we looked at how a large fuel consumer, such as an...
NYMEX Heating Oil Completes Transition to Ultra Low Sulfur Diesel
As of yesterday, NYMEX heating oil futures and options are now ultra low sulfur diesel fuel (ULSD) futures and options. The transition is a long time...
Hedging Energy Risk with Price Targets: A Losing Proposition?
In our role as energy hedging advisors, we regularly receive inquires from companies who have had a difficult time, if not worse, in producing...
The Key Elements of a Successful Energy Hedging Program
Since the NYMEX introduced the heating oil futures contract in 1978, energy consumers, producers, marketers, refiners and processors have had the...