Create a Hedge Position and Allocation for a Repurchase Action

This activity creates a hedge position for a physical commodity and allocates the open action or a buyback action to the hedge position.

An open action can be also be hedged when the repurchase contract is created.

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 Repurchase Contract.
2. Select the Repurchase Actions tab.
3. Right-click the repurchase action and select Hedge Repurchase Action » Hedge Action from the menu.

   The menu displays applicable market commodities, each with its associated market.

4. Select the market commodity for which to create the hedge position.

   The New Hedge Action screen displays.

   Note: The Contract Type, Option Type (if applicable) and Transaction Type are as specified for the market commodity.
   The Owner Organisation and District are inherited from the company and district of the repurchase contract.
   A default Number Of Contracts can only be calculated for open action or for buyback actions that already have a Required Quantity specified.

5. As applicable for the hedge position's contract type, see the following activities for further steps:
   • Create a Futures Contract
   • Create an Options Contract

   Note: The hedge position displays on the Hedge tab. Some hedge position fields may need to be edited on this tab.

6. To invert the sign on the Allocated Quantity, check Invert Allocation for the commodity in the Hedging Allocation table. Default: Unchecked.

   MineMarket updates the Allocated Quantity and Remaining Quantity.

7. Click Save.