Energy Trading and Risk Management (ETRM) Market

Smorkane03 Feb, 2025Business

The effective management of risks involves identifying, assessing, quantifying, and mitigating various types, such as credit risk, operational risk, and regulatory compliance, among others. Among them, price stands out particularly because it results from fluctuations in commodity prices; hence, it can profoundly impact financial performance on trading operations. To mitigate this type of risk, traders use hedging strategies like futures contracts, options swaps, or other derivatives to offset possible losses resulting from unfavourable price changes.