Pricing And Application Of FFA In Dry Bulk Shipping Market

In the system of world trade and transportation, sea transportation accounts for 90% of total transportation volume, which plays a decisive role in the world economy. The most important part of Sea transportation is the transportation of dry and bulk Cargos. Because the dry bulk Cargo market is almost a perfect competition market, Freight will be in a relatively short time to a larger change. In order to avoid risks brought about by the freight fluctuation of dry and bulk cargos, shipping managers have not stopping to the research of freight risk tool.In 1992, between two European ship-owners carried through the first FFA transactions. In recent years, the rapid development of Chinese economy give an great impulse to the development of the world dry and bulk Cargos, makes freight unpredictable and fluctuation of freight intense, This also led the dry bulk FFA market to flourish, FFA transactions have gradually become the shipping futures market leader. However, In the FFA market has rarely seen figure of China's enterprises, most Chinese enterprises are still the main way of using the spot charter, making China's shipping operators completely exposed to the risk of fluctuations in the spot freight rates, the passive acceptance of freight increases.Based on the above-mentioned facts, the thesis is on the basis of FFA related data, uses econometrics and financial engineering knowledge and methods, through the dry bulk FFA market in detail introduction and quantitative research. The main results are: 1) Comprehensive and carefully introduced and analyzed the Dry bulk shipping market and FFA transactions; 2) Adopted Quantitative methods to obtain that FFA market is the effectiveness of the weak market; 3) Arrived at a more precise FFA pricing formula; 4) FFA prices to estimate as the basis for preserving and increasing FFA Case Research; 5) Demonstrated in detail in our country to establish the feasibility of FFA trading system. So that China's shipping operators of dry bulk FFA transactions have a better understanding and grasp, Better participation of dry bulk FFA market transactions, lock freight shipping risk, lower cost of shipping freight, and for the management to provide a basis for decision-making, etc.