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 measure, manage, and mitigate counterparty risk proactively.

  • 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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Chartis Research ranks ION Commodities as a leading technology provider for energy markets for the fourth time in a row

28 February 2024
London – 28 February 2024: ION Commodities, a global leader in energy and ...

ION recognized by IDC FinTech Rankings as a FastTrack FinTech company

4 December 2023
LONDON – 4 December 2023: ION, a leading global provider of trading, analytics, ...

ION Commodities wins CTRM Software House of the Year for the second consecutive year at Energy Risk Asia Awards 2023

10 October 2023
LONDON – 10 October 2023: ION Commodities, a leading provider of energy and ...

ION Commodities ranks #1 in Chartis Research’s Energy50, winning 12 awards

17 August 2023
LONDON – 17 August 2023: ION Commodities, a global leader in energy and ...

ION wins Stevie Award for Customer Service for seventh consecutive year

19 July 2023
LONDON – 19 July 2023: ION, the largest global provider of trading, analytics, ...

ION launches Carbon Zero for trading and managing carbon credits and environmental certificates

22 May 2023
London – 22 May 2023: ION, a leading provider of trading, risk, and ...

Latest Commodities awards

Energy Risk Awards 2023

Oil, Gas/LNG, power, metals and agriculture products

Energy Risk Awards 2023

Market analytics, model valuation and risk exposure management

Energy Risk Awards 2023

Emissions and green certificates

Energy Risk Awards 2023

CTRM Software House of the Year