Helping Oil & Propane Dealers Protect and Capture Margin
Northland provides energy risk management tools to oil and propane dealers throughout the United States. These tools typically take the form of options, which are offered in customized increments depending on the needs of the client.
Products offered are ULSD and Propane swaps and swaptions. Northland’s ability to offer less than standard contract volume (42,000 gallons) makes energy risk management accessible to all businesses that qualify as an ECP under the Commodity Exchange Act. The time frame of coverage is also determined by the client, varying from a few days to several months.
Calls, Puts, and Option Combinations
- End of Month – financially settled to the NYMEX futures price on the last business day of the contract month
- Daily Offset – written for a specific time period; financially settled on a daily basis to the NYMEX futures price; you specify the liquidation schedule (volume per day to be offset) up front
- Average Price Offset – financially settled on the last business day of the contract month to the average NYMEX futures price over the contract month
Swaps
- Rolling Swap – financially settled on the last day of the contract month to the NYMEX futures price
- Bullet Swap – written to expire on a specific day; financially settled on the day of expiration to the NYMEX futures price
- Calendar Swap – financially settled on the last day of the contract month to the average NYMEX futures price over the contract month
- Crack Swaps – financially settled to the spreads between NYMEX crude, heating oil, and/or gasoline futures