Fix your price below the market price in exchange for setting a upper protection limit with a Capped Swap.
The Capped Swap is a combination of a bought swap and sold call option. It offers the swap buyer a lower swap level in exchange for limited upside protection.
Three good reasons to use this strategy
- You do not need full upside protection
- Attractive swap price
- Flexibility in fuel supply
- Tailor-made coverage
- Flexibility in physical supply
- Reduced swap price
- Limited upside protection
- Potential basis risk