According to commodity trader – Rowan Relton, commodity risk refers to the qualms of future market values and the size of the future income caused by the variation in the prices of commodities.
Meaning of Commodity Risk Management
The process of identifying measuring and supervising coercion to organization capital and earnings is called commodity risk management these coercion or risks could stem from a wide variety of sources including financial hesitation legal liabilities strategic administration errors accidents and natural catastrophes.
Know about the actualities about Commodity Risk Management with Rowan Relton, commodity trader.
1. Vast Commodity Risk Data is Real
In the world of commodities, greater loots come when the degree of jeopardy commodity is higher than usual, the ratio between success and failure in this is very minimal. Therefore, a trader or investor can make a lot of money, but they can mislay a lot too. The problem with too much data is that they are trying to weed their way through merging it to fit a specific business need, says Rowan Relton. As they say in trading terms “too much data can murky the water making it difficult to categorize valued trends”
2. Misappropriate use of Customer Relationship Management Data
What is customer relationship management?
It is a process in which a business or other association administers its interaction with customers typically using data analysis to study a large number of statistics.
How are they misusing them?
: – marketers can’t afford to squander their CRM squeezing the most out of your CRM data without getting lost
: – lack of social integration
No marketer should make the mistake of treating their CRM like an island especially in the era of social, media. Communication via your social media is absolutely essential to do. Customer service is a cornerstone of CRM, all the while more and more people are starting to understand the real power of social media they are using it to benefit them by talking to their customers through it.
3. Scarcity of Aligned Astuteness and Plan
Lack of strategy is when a business does not set certain goals to achieve during the time of implementation. A business can face severe consequences when a deficiency of strategy is there. The more the deficiency of aligned intelligence the higher the risk of commodities.
4. Risk, Rewards, and Volatility
A reward is directly proportional to the level of risk one is willing to take. In the world of commodities, the greater the risk, the greater rewards will come with it. Trading is sort of a gamble but with higher rewards, you can win big or lose big.
Commodities are the most unstable asset class. On the other hand stocks, bonds, and currencies are known to have lower alteration and more liquidity than commodities, says Rowan Relton. The price of commodities can double or triple in a short period but the price of raw material cannot double or triple during that time.