on 05-18-2015 11:36 AM
We are trying to use Listed Futures for Commodity Hedging.
Facing 2 problems
We are not able to record price for the Commodity Exposure ID in Hedge Plan in THMEX transaction.
Any idea how to record the price.
Also wanted to know the calculation type or Hedge strategy which we can use for Listed Futures.
Kindly provide your valuable inputs.
Thanks
HI Abhishek,
The pricing details for the commodity exposure cannot be directly maintained in THMEX.The hedged Item derives these information based on the underlying exposure.
Assuming you are on EhP6, the commodity exposure can be created in 2 ways:
1. By integration with Logistics, exposures from POs, SOs and subsequent activities will autmatically be created in TRM which will have all the information like, Commodity Prices - Fixed or Floating, commodity qty,UoM etc.
2. By creating manually from FTREX1.
For creating through FTREX1, you would need to set up Activity types, which specifies whether the exposure is a PO based or SO based or in simple terms whether its outgoing or Incoming. You define header data by giving the info related to currency, transaction activity and other relevant stuff.
Line item data is where you mention the commodity, qty, commodity UoM,quotation type for pricing, whether the price is fixed or floating, currency, due date. You can even enter the fixed prices there.
You also have sub Raw exposure details, in case you want the exposure position to have split in various percentages, or if the exposure is a foreign currency exposure. Prices are maintined in T-code FC17. For Futures you also need to have commodity curve set up in t-code TANCCMASTER.
Please see the screenshots.
FTREX1
Regards,
Nikhil
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
Thanks for sharing the information Nikhil,
I was aware of the process to fix price through Raw exposure in Exp mgmt 2.0.
I wanted to know if there is any other process to directly record the price in THMEX.
Moreover do you have idea on the calculation type used for comm future for listed future?
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
Hi Abhishek,
Its really as per client to decide which Hedge strategy to use. Also depends on What accounting principle you want to follow and what prices you want to consider for your calculation.
However if its just for testing, you can try using the Cash Flow: Spot period method with the calculation category $offset method.
Also there is no other way to enter the commodity prices apart from the ones i mentioned in my previous post.
Regards,
Nikhil
Hi,
Please follow the below process.
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.
User | Count |
---|---|
85 | |
7 | |
6 | |
4 | |
3 | |
3 | |
3 | |
3 | |
3 | |
2 |
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.