Commodity risk officers and managers Mitigating financial risks for business resilience.

Discover what ION can do for you

Identify risks before they become problems

With changing regulations and increasingly volatile commodity markets, risk officers across all industries need a complete view of their exposures and the underlying factors driving risk to ensure business resiliency. To thrive in today’s unpredictable commodity markets, companies need to identify potential threats early, proactively defend against them, and quickly adapt to disruptions. Simultaneously, risk officers and managers must protect their portfolio’s profits through properly structured hedges that comply with appropriate regulatory measures and accounting standards.

  • Financial hedging

    • Financial hedging can bring stability and predictability to the earnings of physical transactions. Through financial derivative instruments—such as forwards, futures, options, and swaps—commodity trading firms can offset the risk of adverse price movements to protect the P&L of their physical positions. Commodity producers also utilize financial hedging to lock in prices of their physical products ahead of harvest via futures. By securing a price, producers can cover their costs and expected margins to guarantee a minimum profit for their physical product.

  • Imbalance management

    • Commodity firms often look to avoid the negative impacts of price volatility by using the same underlying price, with different basis, on both purchases and sales. While this reduces the impact of price volatility, it introduces supply chain risk. To mitigate the effects of supply and demand imbalances, commodity firms rely on effective scheduling, storage, and inventory management. By building flexibility into their supply chains, they can optimize their physical assets to avoid the negative consequences of supply and demand imbalances.

  • Portfolio analysis

    • Commodity trading firms often have separate teams managing various commodities across different regions. This introduces vulnerabilities that can go unnoticed when only managing risk at the book level. By consolidating physical and financial positions across the entire enterprise, firms can expose the risks associated with being overly dependent on certain counterparties and operational areas for supply, sales, logistics, and storage. This tactic also identifies natural hedges between asset classes and currencies, reducing the need for additional risk management efforts.

Why choose an ION Commodities risk management solution?

  • Portfolio valuation

    Revalue portfolios with the latest market prices to quickly assess the impact of market changes and expedite decision making. Model hypothetical what-if scenarios to evaluate the impact of possible future events.

  • Advanced risk analytics

    Identify portfolio risks by analyzing value-at-risk, profit-at-risk, cashflow-at-risk, and portfolio sensitivity. Stress test to gain a better understanding of market, credit, and liquidity risks under multiple scenarios.

  • Hedge effectiveness assessment

    Analyze the effectiveness of portfolio hedging strategies as markets move. Gain visibility into risk at the enterprise level to place macro hedges that balance the portfolio and minimize P&L losses.

Risk management solutions for every company

Your business’ success relies on your ability to manage exposures and risk across the enterprise and optimally hedge using a consistent methodology during times of market volatility. ION’s commodity trading and risk management solutions provide innovative portfolio evaluation tools so you can ensure business control. Start your journey for improved risk mitigation with one of our risk management and analytics solutions.

  • Allegro

    A customizable, industry-leading CTRM for utilities and energy companies.

  • Aspect

    A multi-tenant, SaaS CTRM for liquid hydrocarbons and metals traders moving off spreadsheets.

  • Credit Risk

    A web-based solution to proactively measure, manage, and mitigate counterparty risk.

  • FEA

    A suite of leading portfolio risk analytics and asset optimization tools for decision support.

  • Openlink

    A comprehensive, multi-commodity CTRM for industry leaders operating at scale.

  • RightAngle

    A CTRM with robust scheduling and logistics capabilities for liquid hydrocarbon companies.

  • TriplePoint

    An out-of-the-box, multi-commodity CTRM with configurable functionality.

  • Hedge Accounting

    A derivatives analyzer and toolkit to design and assess hedge effectiveness.

Latest Commodities news

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ION Commodities wins CTRM Software House of the Year at Energy Risk Asia Awards 2022

23 November 2022
LONDON – 23 November 2022: ION Commodities, a leading provider of energy and ...

Golden Pass LNG selects ION Commodities

23 July 2022
Golden Pass LNG’s selection is a testament to ION’s proven success in delivering ...

CEZ Group uses ION’s Beta Program for upgrade success

23 July 2022
London,  14 July 2022: ION Commodities, a global leader in energy and commodity ...

ION Commodities named CTRM Software House of the Year at Energy Risk Awards 2022

10 May 2022
LONDON –10 May 2022: ION Commodities, a global leader in energy and commodity ...

ION Commodities advances trading and risk analytics with new FEA Analyzer

25 April 2022
Powered by predictive analytics and stochastic models, FEA Analyzer unlocks new levels of ...

ION Commodities ranks #1 across the energy and commodity management space

12 April 2022
LONDON – 12 April 2022: ION Commodities, a global leader in energy and ...

Latest Commodities awards

Energy50 2022

Overall Winner

RiskTech100 2022

Commodity Trading Risk Management (CTRM)

Energy Risk Awards 2022

CTRM Software House of the Year

Stevie Awards 2022

Customer Service Department of the Year