If your risk appetite is low or moderate, the application does not give any short-term fixing advice.
For which products are there no fixing advice?
Why is there no advice on the short-term?
What are the consequences?
FOR WHICH PRODUCTS ARE THERE NO FIXING ADVICE?
A. If you have chosen a 'High' risk appetite
The application can give fixing advice up to the first day of delivery of the consumption period.
B. If you have chosen a 'Low' or 'Moderate' risk appetite
The application does not provide fixing advice for any products whose delivery starts in the following month.
Example 1: In February, the application does not provide fixing advice for the monthly product March (M+1).
Example 2: In December, the application does not provide fixing advice for the January-March quarterly product of the following year (Q+1).
WHY IS THERE NO ADVICE ON THE SHORT-TERM ?
To provide a good economical tool to most of the companies we decided:
- Not to provide market data for each forward product.
So, we studied the correlation between the evolution of the price of the different forward products to select a product of reference whose evolution is a good indicator of the evolution of many other products.
- The result is that their is a divide between products which will be delivered in the short-term market and those delivered in the medium-long term. The first ones follow their own dynamics while the second one follows a trend close to the trend of CAL+1.
- Since we provide the market data for CAL+1, the application can provide relevant fixing advice for most of the forward products at a reasonable cost for the user, but can't give relevant advice for the products delivered in the short-term.
WHAT ARE THE CONSEQUENCES ?
A. Don't refer to the forecasts of the application to make fixings on the short-term
If the price of a part of the products has remained variable during the short-term period (M+1) you have the possibility to make fixings freely as long as the delivery has not started.
However, it is not recommended to use the application's forecasts as a basis for deciding to make these fixings. The application's forecasts are only relevant for products delivered in the medium to long term.
B. Big fixing 2 months before the delivery when the forecasts are bearish
The application advises to fix the price of a large part of the consumption before it is exposed to the short-term market.
If the trend of the reference forecast for mid-long term products is bearish and a large part of the consumption is still at variable at that time, the application may advise you to make a big fixing on the last day for that product.