A couple friends asked me if I could recommend anything on commodity hedging (mainly for industrial conglomerates, although I assume general strategies would be quite helpful as well). I have searched the forum, and goggled, for any tips on good websites/books, but haven't been able to find anything good.
Since I personally will join a consultancy, and not bank, my knowledge is reasonably limited, and I simply wonder if you guys have any recommendations?
Thanks
Im not sure there's any. You have your standard array of options strategies and structured products, or using derivatives. But it's rather specialized, hence not many books out there, if any.
There isn't a book nor website that will guide you through hedging or a cookie cutter model. You must first understand HOW to trade futures and options before you even look towards hedging commodities. Most importantly you must know the profit/loss of the business to understand what complex(product) needs to be used for your benefit, you just may not need to hedge with the end product.
Example....
An airline just doesn't hedge crude/heating oil but with bond and currency futures as well.
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