Professional Documents
Culture Documents
SSY Futures Ltd are authorised and regulated by the Financial Conduct Authority in the United Kingdom
and are Overseas NFA members in The United States. The material contained herein is for information
purposes only and should not be seen as a trading recommendation or solicitation of trade.
Mar 2021
SIMPSON SPENCE YOUNG
• Established 1880
• Largest privately owned shipbroker in the world
• Worldwide network of 20 offices
• A Leading Baltic Panelist
• Expertise in:-
➢ Dry Cargo
SSY Futures Ltd
➢ Tankers 32 Derivatives Brokers
➢ Futures In London, Singapore & NY
➢ Research and Consultancy
➢ Sale and Purchase Team of 12 analysts
➢ Ship Finance on dry bulk, tanker and
➢ Agency and Towage gas markets
Mar 2021 | 2
THE BALTIC INDICES
Mar 2021
THE BALTIC EXCHANGE
Mar 2021 | 4
THE BALTIC PANELISTS
Mar 2021 | 5
BALTIC INDICES ARE PRICED IN US$ PER DAY
(TIMECHARTER) OR FREIGHT RATES IN US$ PER
METRIC TONNE (VOYAGE)
• Time Charter:
• Panamax Route 2a_82: Europe to the far east priced
in USD/Day.
• Voyage:
• Capesize Route 3: Tubarao to Qingdao, iron ore
route priced in USD/Mt.
The Baltic Index Council decide on which rates to report and vessel
specifications. They are an independent group of industry experts
working with the Baltic’s Senior Freight Reporter.
Mar 2021 | 6
BALTIC TYPE VESSEL DESCRIPTIONS
Mar 2021 | 7
BALTIC SUPRAMAX
TIME CHARTER AVERAGE COMPONENT PARTS
Mar 2021 | 9
WHAT IS AN FFA?
Mar 2021
FFA DEFINITION
Mar 2021 | 11
Cape Time Charter Average
FORWARD CURVE – 29th Mar 2021
Mar 2021 | 12
CAPE TC AVG Spot & FFAs 29th March ‘21
30,000
25,000
20,000
15,000
10,000
5,000
Mar 2021
ELEMENTS OF A TIMECHARTER AVERAGE FFA
Mar 2021 | 14
FFAs CASH SETTLE
AGAINST THE AVERAGE DAILY PRICE PER MONTH
Mar 2021 | 15
CAN WE CLOSE OUR FFA?
AN FFA CAN RUN UNTIL SETTLEMENT OR BE CLOSED
EARLY…
Mar 2021 | 16
OPPORTUNITIES FOR USING FFAs
Mar 2021 | 17
CLEARING
Mar 2021
TRADITIONALLY FFAs WERE TRANSACTED DIRECTLY
BETWEEN THE BUYER AND THE SELLER
BUYER Seller
SELLER
Mar 2021 | 19
OTC BI-LATERAL TRADES EVENTUALLY LEAD TO
INCREASED COUNTERPARTY RISK AS TRADERS OPEN
AND CLOSE FFAs WITH MULTIPLE COUNTERPARTIES
A
B
F
G
Mar 2021 | 20
COUNTERPARTY CREDIT RISK IS MITIGATED BY USING A
CENTRAL CLEARING COUNTERPARTY
Central
Clearing
Counterparty
EEX or SGX
Mar 2021 | 21
CLEARING WITH BLOCK FUTURES
CENTRAL
CLEARING CLEARING CLEARING
BROKER COUNTERPARTY BROKER
EXCHANGE
Mar 2021 | 22
THE COST OF CLEARING
CURRENT INDICATIVE SGX ASIACLEAR PRICING.
• Netting of positions
• Standardised contracts
• Increased liquidity
• Regulated market
Mar 2021 | 24
ADDING VALUE
Mar 2021
Trading Strategies
• Options Strategies
Mar 2021 | 26
FFA MARKET VOLUMES
Mar 2021
DRY FFAs vs Options
Quarterly Volume
600000
500000
400000
300000
200000
100000
Mar 2021 | 28
CURRENT MARKET SHARE BY OPEN INTEREST
Supra, 21.00%
Cape, 31.00%
Pmax, 48.00%
Handysize,
0.00%
Mar 2021 | 29
FFA Use by Region and Company Type
Mar 2021 | 30
CONCLUSION
Mar 2021
CONCLUSIONS
Mar 2021 | 32
London T: +44 20 7977 7597
Singapore T: +65 6854 7126
E: duncandunn@ssy.co.uk
ssyonline.com
Mar 2021