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Lead hedging in LME using option structures
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Forex Hedging |
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Published on: 14th December 2020
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In LME, lead can be hedged using futures and options. The market participants like the miners, producers, traders, hedge funds, bulk consumers often find it difficult to choose the exact instruments, strikes, timing, etc. In the case of futures, the obligation is the biggest deterrent whereas in options the premiums are expensive. So, low-cost appropriate option structures with effective monitoring systems may provide sufficient flexibility with much lower cost. Here the pricing plays a vital role. Because of the nonavailability of pricing easily, most of the participants do not use options or structures.
We intend to present the option pricing to the participants of the LME Lead market.
Few of the prices are given below with strategies.
Buy-side strategies for Lead :
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[table id=27 /]
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Sell-side strategies for Lead :
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[table id=31 /]
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