Report Writing
Budget: $30 – $250 AUD
ssume you are jet fuel oil
producer, and you are going to sell 10,000 barrels of jet fuel oil in 3 months.
You have $100,000 USD cash on hand at the beginning of your trading. You must use
at minimum 70% of your account balance to hedge your oil price risk. Meanwhile,
you are allowed to have up to 30% of your account balance to speculating/arbitraging,
and the speculation/arbitrage products are not limited to Energy futures (e.g., you can
even use Crypto futures to earn short-term profit, but also mind the potential loss).
Your report must include the following sections:
1. Trading objectives:
Give an overview of your trading objectives.
2. Summarize your hedging strategy
Provide a summary on how you use Energy future products to hedge your commodity price
risk. The content should include but not limited to:
Do you think it is necessary to hedge your jet fuel price risk, and what percentage of
your exposure you think you should hedge (e.g., ?% out of the 10,000 barrels)
Which future product(s) you use to hedge your risk, outline their basic specs?
What strategy you employed to hedge (e.g., delivery month, contract price, contract
amount, long or short, etc)?
What is the performance of your hedging by the end of 12th April 2022? And how the
spot price change for jet fuel oil?
Are there any differences between jet fuel oil and the underlying assets of your selected
hedging product? And what risk can be generated from these differences?
3. Summarize your speculation trading
Provide a summary on how you use future contracts to speculate/arbitrage during your
trading period. The content should include but not limited to:
Why you take/not take speculation position?
How the speculation performed and explain your profit/loss?
producer, and you are going to sell 10,000 barrels of jet fuel oil in 3 months.
You have $100,000 USD cash on hand at the beginning of your trading. You must use
at minimum 70% of your account balance to hedge your oil price risk. Meanwhile,
you are allowed to have up to 30% of your account balance to speculating/arbitraging,
and the speculation/arbitrage products are not limited to Energy futures (e.g., you can
even use Crypto futures to earn short-term profit, but also mind the potential loss).
Your report must include the following sections:
1. Trading objectives:
Give an overview of your trading objectives.
2. Summarize your hedging strategy
Provide a summary on how you use Energy future products to hedge your commodity price
risk. The content should include but not limited to:
Do you think it is necessary to hedge your jet fuel price risk, and what percentage of
your exposure you think you should hedge (e.g., ?% out of the 10,000 barrels)
Which future product(s) you use to hedge your risk, outline their basic specs?
What strategy you employed to hedge (e.g., delivery month, contract price, contract
amount, long or short, etc)?
What is the performance of your hedging by the end of 12th April 2022? And how the
spot price change for jet fuel oil?
Are there any differences between jet fuel oil and the underlying assets of your selected
hedging product? And what risk can be generated from these differences?
3. Summarize your speculation trading
Provide a summary on how you use future contracts to speculate/arbitrage during your
trading period. The content should include but not limited to:
Why you take/not take speculation position?
How the speculation performed and explain your profit/loss?