Commercial Hedger

Commercial Hedgers are typically the end-users of commodities. Common examples are multinational grain merchandisers that source product in order to serve food production customers, supply ethanol plants, and/or meet export market demands.

Commercial hedgers may use SXM OTC instruments in order to:

  • Hedge their up-side market price risk with OTC Lookalike options and Swaps. 
  • Take advantage, of SXM’s initial and variation margin thresholds (if they qualify for them), which in some cases can act as financing.
  • Find hedging strategies using OTC customizable options that enable them to manage their production with specific contract sizes, expiration dates and strike months.
  • Pursue the ability to pass along to customers potential cost savings achieved through hedging.

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Trading over-the-counter and exchange-traded derivatives is not suitable for all investors and involves substantial risk.  StoneX Markets, LLC (“SXM”), a subsidiary of StoneX Group Inc., is a member of the National Futures Association and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer.  SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM.  Any recipient of this material who wishes to express an interest in trading with SXM must first prequalify as an ECP, independently determine that derivatives are suitable for them and be accepted as a customer of SXM.  Trading over-the-counter (“OTC”) products or “swaps” involves substantial risk of loss. This is not an offer to buy or sell any derivative. This material does not constitute investment research and does not take into account the particular investment objectives, financial situations, or needs of individual clients or recipients of this material.  You are directed to seek independent investment and tax advice in connection with derivatives trading.

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