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What Are Cash Settled Swaps


Cash settled swaps are financial hedging tools which offer users a quick and efficient way to reduce, or increase, price exposure to a specific product.

How do they work?

Two companies agree a price and quantity today, with reference to a trusted benchmark index to be published at a specific date in the future.
If the index at that future date is higher (lower) than the price originally agreed, then the seller (buyer) pays the buyer (seller) the difference between the two prices, multiplied by the quantity.

How cash settled swaps are used most efficiently for risk management purposes varies from company to company. To obtain further information please do not hesitate to contact a Direct Hedge representative or simply e-mail your request to info@DirectHedge.com

Registered companies trade cash settled swaps basis the standardized Direct Hedge rule-set and credit criteria. This enables Direct Hedge to concentrate market liquidity, ensuring participants always achieve best price.

Direct Hedge currently offers the opportunity to trade cash settled swaps on-line for:

A range of Phosphate and Nitrogen based Fertilizers
A range of edible oils
Rice

To trade cash settled swaps on-line you must register your company. For details of other products and services offered by Direct Hedge please send an e-mail to info@directhedge.com .