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Last Look - Oil pares gains but finishes at three week high
Natural Gas Producer Controls Price Volatility through Hedging
MARKETS: NATURAL RESOURCES | COMMODITY: NATURAL GAS | CLIENT: PRODUCER

 

Situation

Attempting to navigate the recent volatility in the natural gas markets, this Natural Gas Producer hoped they could wait out the turbulent market without action, believing prices were likely as low as they would go.

However, a short time later, prices fell further, and their inaction put them in a more challenging spot.

Without sufficient visibility into the market, this producer struggled to quantify their risk and maintain confidence in their hedging strategy.

With the situation now dire, they engaged AEGIS for assistance. 

 

 

 

 

Outcome

According to this Natural Gas Producer, the technology AEGIS employed exceeded their expectations. 

The Recommend module within the AEGIS platform helped tremendously in mitigating their downside risk because the driving information that allows risk to be quantified is easily accessible. 

This systematic approach to hedging allowed them to regain control of their hedging program amid extreme volatility in Natural Gas markets. More importantly, they continue to hold monthly check-ins with the AEGIS team to retest and reassess their current strategy against quantifiable metrics and goals. 

This process ensures that they are up to date on market moves and ready to act when necessary. Proactive hedging recommendations provided by the AEGIS technology and team allow for a more strategic and less reactionary risk management program.  

 

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This case study is not indicative of future performance or success. Commodity interest trading involves risk and, therefore, is not appropriate for all persons; failure to manage commercial risk by engaging in some form of hedging also involves risk. Past performance is not necessarily indicative of future results. There is no guarantee that hedge program objectives will be achieved. Neither this trading advisor nor any of its trading principals offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Hedge advisory services are performed by the registered commodity trading advisor AEGIS-CTA, LLC, a wholly-owned subsidiary of AEGIS Hedging Solutions, LLC. This case study is not required to be and has not been, filed with the Commodity Futures Trading Commission ("CFTC"). The CFTC does not pass upon the adequacy or accuracy of this commodity trading advisor disclosure. Consequently, the CFTC has not reviewed or approved this case study.

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