English
Energy & Power
Served as expert in international natural gas trading dispute
Commodity Risk Consulting
Addressing the risks of both associated physical commodities and any associated derivative exposure.
Explore our Commodity Risk Consulting solutions
Commodity Risk Consulting
Addressing the risks of both associated physical commodities and any associated derivative exposure.
Contact UsMany companies have exposure to fluctuating commodity prices built into their everyday businesses. A company with a fleet of vehicles has exposure to fuel prices, food manufacturers may have exposure to agricultural commodities and fuel prices, manufacturing plants have exposure to power prices, and power producers have exposure to fuel costs and availability.
Whether to protect themselves against extreme price movements, to better maximize their cash resources, or to stabilize their forecasting, these companies may benefit from assistance with managing those risks. We address the risks of both associated physical commodities and any associated derivative exposure.
Stout has deep industry and consulting commodity risk experience assisting companies at all levels of sophistication, from guiding those just starting out in hedging to sophisticated trading floors in need of proactive and preemptive risk management assistance.
Our Services
Contract Negotiation
We assist clients in negotiating and developing contracts that optimize their commodity procurement and trading terms. Our experts ensure that contracts are tailored to mitigate risk, align with market conditions, and protect and optimize the client’s financial and physical exposure requirements.
Policies and Procedures Development
We provide financial advisory and consulting services to companies who are revising commodity trading policies and procedures or developing them for the first time. Appropriate policies and procedures aligned with the company’s risk management goals enable clients to monitor their positions appropriately and identify any problems in execution before they become significant. We also tailor these policies and procedures to be able to quickly respond to regulatory and litigation inquiries.
Risk System Selection
We guide clients through the risk system selection process, ensuring that the chosen system aligns with their specific needs, budget, and existing technological infrastructure, thereby enhancing their risk management capabilities.
Alignment of Portfolio and Limits
We assist companies in developing strategies to ensure that their trading limits and their trading portfolio are optimized. This involves evaluating current positions, risk tolerance, and market conditions to create a balanced and effective trading strategy that maximizes returns while minimizing risk. These risk measurements are customized for the client so that they address the simplest exposures to the most complex with multi-level derivative and multi-faceted risk measurements.
Compliance and Preemptive Services
We have experience assisting companies in compliance with FINRA, FERC, CFTC, SEC, NASD, and other governing laws. We understand that any company engaged in commodities trading may be subject to a variety of laws that govern their businesses. Our deep understanding of these laws and the way the various regulatory bodies interpret them helps our clients stay compliant and avoid regulatory penalties.
Hedge Development and Evaluation
We help clients develop and evaluate hedging strategies to protect against adverse price movements in commodity markets. Our services include assessing the effectiveness of existing hedges, recommending adjustments, and implementing new hedging instruments to ensure optimal risk management. We conduct a thorough risk tolerance assessment so that the recommendation aligns with the overall company goals and appetite for such risks.
Third-Party Risk Assessment
We perform comprehensive risk assessments of third parties to identify potential vulnerabilities and recommend strategies to mitigate these risks, ensuring a more secure supply chain and trading environment. This includes third-party credit assessments and the structuring of margining agreements and the associated trigger clauses that enact immediate protection for the firm against third party material adverse changes.
