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Agenda
1) Use Case reminder
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Today we continued our discussion on commodities, and on the CPMI IOSCO / FSB discussion on the UPI, which is still in work. The ROC Derivatives Service Bureau is responsible for the UPI, and it is possible that they will describe the properties of a derivative in CDE terms as part of that work. See https://www.risk.net/derivatives/7706826/ready-for-the-unique-product-identifier-upi-in-two-years and https://www.iosco.org/library/pubdocs/pdf/IOSCOPD598.pdf (for the CDE) for more on ongoing work. The draft UPI document is available at https://www.iso.org/obp/ui/#iso:std:iso:4914:dis:ed-1:v1:en (possibly through TC 68).
Commodity Future: It is an agreement to either buy or sell a particular amount of a commodity on a pre-decided date at a pre-determined price. Commodity Forward: It is an agreement between two parties who agree to exchange a certain quantity of a commodity at a pre-determined price on a fixed future date. Commodity Option: This type of contract gives the holder the right but not obligation to execute the transaction on the expiration date. The put option gives the right to sell while the call option gives the righttobuy. Commodity Swap: In this type of agreement,the floating price of an underlying asset is traded for the fixed price over a particular period of time.
See also https://www.educba.com/commodity-derivatives/