A swap to exchange cash flows based on the price of an underlying commodity. Put another way, the commodity swap involves exchanging a spot price (the floating leg) for a fixed price over a preset period. Effectively, it is a series of forward contracts on a commodity with the same delivery prices but different maturity dates.
Derivatives
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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