Component documentationFinancial Risk Management for Commodities Locate this document in the navigation structure

 

In the Financial Risk Management for Commodities area, you find all the functions that you need for commodity risk management in Treasury and Risk Management.

  • Exposure Management helps you to identify the risks from your commodity transactions.

  • Trading, position management, and accounting for the hedging transactions with which to hedge risks from your commodity transactions.

  • In Hedge Management, you can make assignments between risks in a hedge plan, exposure positions, and hedging transactions, and perform hedge accounting.

  • Further, you can perform risk analyses and determine net present values for the exposure positions and the related hedging transactions.

Implementation Considerations

To enter commodity transactions, you first need to make the required settings in Customizing for the Transaction Manager:

  • You need to make settings for the master data and transaction management, such as defining the product types and transaction types.

  • Make the required settings in Customizing for the commodity master data by choosing   Transaction Manager   Listed Derivatives   Master Data   Commodities  .

  • Master data for the commodity market data.

Once you have made the necessary settings in Customizing, you need to specify the master data:

  • Enter the required business partner data.

  • Specify the required commodity master data.

  • Create the master data required for the commodity futures and options on commodity futures in the class master data.

  • Specify the required portfolios, futures accounts, and the corresponding position indicators.

  • Enter the required market data for commodities.

    See also: Commodity Curve

Integration

  • The partnership with Triple Point, which provides a front-office system, can help you link the physical side and paper deal side of a commodity futures transaction.

  • You find all the functions you need in the application menu under   Treasury and Risk Management   Financial Risk Management for Commodities  .

  • You can use the functions in Financial Risk Management for Commodities to enter the master data and financial transactions manually. This data can also be entered using the BAPIs in the Commodities Area and the existing general BAPIs for financial transactions and classes.

    See also: BAPIs for the Transaction Manager

Features

The system helps you process the financial transactions for commodities from the posting stage, to margin management through to the key date valuation.

The net present values (JBRX) are calculated in the Market Risk Analyzer. Here, you can also use the function Key Figure Analysis (AISGENKF) to execute mark-to-market analyses and sensitivity analyses for commodity paper deals.