Commodities Hedging with Ryuken Capital

Commodities hedging is the fourth core service provided by Ryuken Capital. The firm helps its clients manage their risks related to commodities price exposure by combining market insights with access to trusted, regulated trading partners.

Key Points on Commodities Risk

Businesses which buy and sell commodities will inevitably face commodities price risk. The risk in itself is defined as: "The potential losses resulting from adverse price fluctuations on commodities".

Commodities are notorious for being very volatile. At any point in time, huge price increases or spectacular collapses can take place. The impact on a company's financial results can be severe especially if the commodities concerned are used in large quantities and cannot be substituted.

Hedging price risk on commodities has historically been harder than on Forex. However, this does not mean that companies cannot set up an efficient hedging policy which could add significant value in managing unpredictable price swings.

Ryuken Capital as your Commodities Hedging Partner

We operate as an Introducing Broker between corporate clients looking to hedge their commodities price risk and trading entities which provide a full suite of services on commodities.

Ryuken Capital facilitates introductions between corporate clients and regulated commodities trading firms, helping align service expectations and relationship needs.

The Ryuken Framework on Commodities Hedging services in Six Points

Initial discussion with the client to understand its commodities exposure and the impact of price fluctuations on financial results.

Does the client have a hedging policy? If yes, how effective has it been so far? If no, to what extent can the client absorb the effects of sharp negative moves on the commodities to which it is exposed.

What are the expectations of the client regarding a commodities hedging partner? What matters most for the relationship to be successful?

How comfortable is the client with hedging instruments? Which types of instruments are most aligned, in their view, with the client’s risk appetite and objectives, to be discussed further with trading partners?

What is the client looking for in terms of market insight? We aim to tailor the analysis to the client's specific needs.

What Terms and Conditions would be the most satisfactory to the client while taking into consideration the constraints of the trading partners?

If you’d like to explore relationship-based solutions for commodities price risk, contact Ryuken Capital at contact@ryukencapital.com

Regulatory Note

Ryuken Capital Ltd does not provide investment advice or execute trades. All hedging decisions and transactions are carried out directly between clients and FCA-regulated trading entities. Ryuken Capital acts as an unregulated corporate introducer, operating strictly within the FCA perimeter.