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Trading & Risk Management
Getting the basics right.
Making trading decisions are hard enough. Markets are influenced by so many factors these days. Price determining information is vast. For most market participants, getting the market consistently right is an unrealistic expectation. A more realistic target, however, is to benefit from having in place the right risk management framework and approach for your business, given all this uncertainty - to understand your risks, give yourself the best tools and strategies for success, and ensure strong controls and protocols.
New Canopy can help in a number of areas.
Risk Analytics
It still amazes us just how many businesses don’t fully understand, measure and report their commodity and forex risks accurately. We can help you put risk into context that is specific to your business, your supply chain, operation or even your brand positioning. Our markets are volatile and always largely unpredictable. Making trading and/or creative hedging decisions based on sound risk management analysis is at least one major thing that every business should and can control.
Governace and Performance Transparency
Being in control shouldn’t mean tying the business up in knots and stopping decision makers from doing what’s right. Our approach is that trading protocols and governance processes and structure should match your risk appetite and reflect your available trading toolkit and playbook. Trusted performance metrics should also be used to assess trading activity and define capital and Value At Risk exposure limits.
New Canopy can assist with getting this right for your business.
Trading tools
No matter your circumstances, having a simple binary decision to transact or not on a particular day is rarely the only risk management strategy available to you. Many companies even consider transacting for forward months as being “a risk” but, strangely, not a decision not to transact !
We can help you explore alternative instruments and transaction types that may be appropriate for your risk scenario and better position your business to gain advantage.
Expanding your playbook
Sometimes, having an ambition for new trading strategies can actually help you challenge who you trade with, on what terms and for what benefit ? Is it the optimal way for you to source or monetise your product….even if it’s the most convenient ? Does selling into another market afford you the benefit of locking in secure forward prices, when you want to price ? This may be more beneficial overall than just selling in the spot. If you transact with a different supplier, will they extend innovative risk management products to you, like embedded options ?