Commodity Performance Swap

Master Complex Financial Derivative Contracts

Through Interactive AI Learning



A Commodity Performance Swap is a financial derivative that allows two parties to exchange the performance of a specific commodity or commodity index for a fixed or variable payment. Typically used by investors and companies to hedge against commodity price fluctuations or speculate on commodity price movements, these swaps are structured so that one party agrees to pay returns based on the price changes of the commodity (e.g., oil, gold, or agricultural products) or index, while the other party pays a predetermined rate. This arrangement enables market participants to manage exposure to commodity price risk without directly trading the physical commodities. 

6039 com-ex42-index-return-swap-reinvestment-feature

6040 com-ex43-WTI-variance-swap