Active Commodity Futures Strategies: The Importance of Risk Management and Implementation Discipline

2005 ◽  
Author(s):  
Hilary Till ◽  
Joseph Eagleeye
Keyword(s):  
Risk Management ◽  
Commodity Futures

Understanding the intention to use commodity futures contracts

2019 ◽  
Vol 79 (5) ◽  
pp. 582-597
Author(s):  
Marius Michels ◽  
Johannes Möllmann ◽  
Oliver Musshoff
Keyword(s):  
Risk Management ◽  
Technology Acceptance ◽  
Risk Reduction ◽  
Political Support ◽  
Commodity Futures ◽  
Futures Contracts ◽  
Equation Modeling ◽  
Price Risk ◽  
Intention To Use ◽  
Content Type

Purpose Adoption rates of commodity futures contracts among farmers are rather low in Europe despite their political support. The purpose of this paper is to examine whether the Technology Acceptance Model (TAM) can contribute to the understanding of farmers’ intention to use commodity futures contracts. Here, the authors explicitly distinguish between usage motives for price risk reduction and speculation. Design/methodology/approach The study is based on an online survey with 134 German farmers using partial least squares structural equation modeling to estimate the TAM. Findings The intention to use commodity futures contracts is mostly driven by farmers’ motivation for speculation rather than price risk reduction. Assuming risk averse farmers, this result could explain low adoption rates. Furthermore, perceived ease of use has a positive effect on the intention to use commodity futures contracts. Practical implications Handling of price hedging instruments should be facilitated to increase farmers’ adoption. Effective marketing trainings, which can demonstrate the ability of commodity futures contracts to reduce price risk, could increase farmers’ motivation to use them for their risk management instead of speculation. Originality/value This study analyzes path relationships between constructs expected to influence the intention to use commodity futures contracts which are allowed to be estimated by the TAM in one model. Here, the authors explicitly distinguish between usage motives for price risk reduction and speculation. This is the first study applying the TAM to price risk management tools.

scholarly journals Commodity risk management

2016 ◽  
Vol 5 (3) ◽  
pp. 11-18
Author(s):  
Hilary Till
Keyword(s):  
Risk Management ◽  
Asset Management ◽  
Hedge Fund ◽  
Commodity Futures ◽  
Fund Management ◽  
Futures Trading ◽  
Risk Management Methodology ◽  
Management Issues

This article discusses the practical issues involved in applying a disciplined risk management methodology to commodity futures trading. Accordingly, the paper shows how to apply methodologies derived from both conventional asset management and hedge fund management to futures trading. The article also discusses some of the risk management issues that are unique to leveraged futures trading.

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