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Get more margin and less risk

Keeping fuel costs within a predictable range protects you from unexpected changes in the price of fuel. Changes that could otherwise seriously impact your budget and profit margin.

Zero cost collar 

Zero Cost Collar is a paper hedge agreement designed to keep your fuel prices within an agreed price range. Also known as cap and floor.

Three good reasons to use this strategy:

  • Rising fuel prices would seriously undermine your business
  • You would like to benefit from falling prices after having fixed your maximum fuel prices
  • You would rather establish a floor level than pay an upfront cap premium

Benefits Disadvantages
Protection from price increases Opportunity loss when prices fall
Flexibility in physical supply Potential basis risk
No upfront premium Margin calls

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