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CHI
Compass®  |
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| CHI
Compass® Contracts are innovative contracts
that rely on newly introduced OTC derivatives.
Some contracts provide market protection using
averaging techniques, while others more closely
resemble exchange traded options with non-traditional
expiration dates. All of our contracts can
be used in a comprehensive marketing plan
to more effectively manage price risk. |
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Energy CHI Compass® - Capped
Average™ |
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| This
contract establishes a long futures position
at the lower of a cap price or the average
price over a fixed timeframe. Cost, or premium,
is set when the contract is initiated. This
contract is used to protect against higher
prices (maximum price contract, add premium
onto maximum flat price to customer), while
leaving some downside price potential in place.
The long position is financially settled between
Country Hedging and the business. If the CHI
Compass® contract is entered into for
a customer, the futures price established
is applied to the contract for physical gallons. |
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