Figures compiled by the Baltic Exchange show that April 2015 was the busiest month of the year for the dry bulk freight derivatives market. In excess of 140, 000 lots were traded in the Forward Freight Agreement (FFA) and options markets, a 60% increase on average volumes for the first three months of 2015.
Commenting on the rise, Baltic Exchange Chief Executive Jeremy Penn said:
“Unlike previous rises in the FFA market, this has come against a backdrop of very low spot rates in the physical shipping market. Much of the rise was driven by a surge of interest in Capesize options, 40, 000 of which were traded in April.”
The Baltic Exchange’s electronic trading platform, Baltex, which provides a block trade facility for brokers to report trades being cleared at LCH. Clearnet saw more than 66, 000 lots reported via its systems.
April 2015 volume statistics (lots per side)
Cape Options: 40, 260
Panamax Options: 4, 050
Supramax Options: 120
Total Options: 44, 430
FFAs: 99, 625
FFA + Options 144, 055
The Baltic Exchange provides weekly FFA and options trading volumes as well as open interest data. Published every Monday, the information is based on figures collected at the end of the business day on Fridays.
A dry lot is defined as either one time-charter day or 1000 tonnes of voyage based ocean transportation.