Carry Hedge Positions Forward or Back

Carrying forward or back is done when a quotation period is overhedged; for example, because of despatch orders being delivered in a different month from what was originally planned.

See Carrying Forward or Back for an explanation and examples.

Security Note: You need the Allow the user to maintain hedge actions security right in the Accounting user group security rights group for this activity.

Activity Steps

  1. Open the Hedging Explorer.
  2. Select the Hedge Actions tab.
  3. Right-click in the Hedge Actions table and select Carry Forward Or Back from the menu.

    The Carry Forward Carry Back screen displays.

  4. Evaluate a quotation period:
    1. Complete the following fields.
      • Commodity—Select from the commodities defined in the Market/Commodity Editor.
      • District—Select from the districts defined on the Organisations panel of the Solution Explorer.
      • Original Period—Quotation period to evaluate.
    2. Click Search.

      The (Original) Hedge Actions table displays locked hedge positions that have a selectable (or no) status:

      • Futures contracts with a maturity date in the original period
      • Swaps contracts with a quotation period on an average leg that matches the original period

      Options contracts are excluded from the search results because options contracts can be withdrawn, sold or left to expire if they are no longer required or financially favourable.

      Spread contracts are also excluded from the search results.

      The hedging summary for the period displays below the hedge positions.

      Note: If the hedged percentage in the summary is less than 100%, the period is underhedged and carrying forward or back is not required. Click Cancel to close the Carry Forward Carry Back screen.

  5. Select the hedge positions to include in the carry forward or back operation by performing any of the following steps:
    1. To include a hedge position, check Selected.
    2. To exclude a hedge position, uncheck Selected.
    3. To select all hedge positions, right-click and select Select All from the menu.
    4. To de-select all hedge positions, right-click and select Deselect All from the menu.
  6. Enter details for the carry forward or back operation:
    1. Select the Target Period to use as the quotation period for the second leg of the new swaps contract.
    2. Select the Market Commodity to use as a template for the new swaps contracts.

      Select from the market commodities defined in the Market/Commodity Editor. Only market contracts with the selected Commodity and a Contract Type of Swaps display.

    3. Enter a Group Reference for the hedge action group(s) if required.

      If multiple groups are created, MineMarket adds a numerical suffix to the name to distinguish between groups. For example, if "CarryForward" is entered, groups are called "CarryForward1", "CarryForward2", and so on.

      If no name is entered, MineMarket generates default name(s).

    4. Enter the Quantity To Carry and update the Unit if required. The default unit is as specified for the market commodity.

      The quantity to be carried must be a multiple of the Market Contract Quantity defined for the market commodity.

  7. Create new swaps contracts:
    1. Right-click in the (New) Hedge Actions table and select New from the menu.

      The New Hedge Action screen displays.

      Note: The Transaction Type defaults to the opposite of the net hedge position in the hedging summary.

    2. Edit the Transaction Type and Date if required.
    3. Select the Maturity Date.
    4. Select an Owner Organisation.
    5. Select an Action Classification and Broker if required.
    6. Enter the Number Of Contracts.
    7. Click Create.

      The New Hedge Action screen closes.

      A message displays the status of the hedge position creation.

    8. Click OK.

      A double row displays in the (New) Hedge Actions table. Each row is for one leg of the swaps contract The Price Type for both legs is Average. The Quotation Period for one leg is the original period and for the other leg is the selected target period.

    9. Create other swaps contracts as required.

      Important: The quantity to carry must equal the total quantity of the new swaps contracts.

  8. Click Confirm.

    A confirmation message displays.

  9. Click Yes.

    The Carry Forward Carry Back screen closes.

    MineMarket creates the swaps contracts and hedge action groups as required.

  10. Click Save.