Capesize

13750

May-17
450.00 3.38%

Panamax

8300

May-17
-200.00 -2.35%

Iron Ore

61.5

May-17
-0.50 -0.81%

Sing 380

292.65

Jun-17

Coking Coal

177

May-17
1.00 0.57%

Nola Urea

172

May-17
3.00 1.78%

Trade Forward Freight Agreements (FFAs)


Why trade Forward Freight Agreements (FFAs)?



Changes in the freight market, including the increased use of index pricing reflecting higher volatility in freight rates have made the use of freight derivatives more important than ever.

Current market conditions and a focus on cost saving only heighten the need for effective risk management strategies.

"The FFA market is 99% cleared, which provides participants with protection against counterparty default risk."

Freight derivatives offer a number of advantages to owners, charterers and traders

  • FFAs are easy to fix and close out which allows profit-taking and better cash management;
  • FFA forward curves are a good indication of future price direction. Freight rates can be guaranteed for up to three years ahead;
  • FFA positions can be bought or sold prior to expiry, with no physical performance and no re-negotiations from counterparties;
  • The FFA market is 99% cleared which provides participants with protection against counterparty default risk.

Forward Freight Agreements (FFAs) Market Index