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RESEARCH PRODUCT

Managing Risk in Financial Market in Shipping Industry

Vegard Benjamin ElvenessDimas Mukhlas Widiantoro

subject

FinanceTerm paperCommerceMarket segmentationbusiness.industryComputerApplications_MISCELLANEOUSFinancial informationFinancial marketFinancial analysisBusinessVolatility (finance)GeneralLiterature_REFERENCE(e.g.dictionariesencyclopediasglossaries)

description

Based on the knowledge from shipping we would like to study one option strategy for investments on shipping stocks. Since the term paper is relatively short we have chosen one market segment, namely the offshore market, and one shipping company, namely Farstad Shipping. We will use the theory of freight rates from Martin Stopford`s book, Maritime economics, and apply it to the real world. The reason for this is that the freight rates are the income for the shipping companies. Furthermore we will use the financial information from Farstad Shipping to see what the value of Farstad Shipping stocks should be in the future. This we will do based on the freight rates in the offshore market. The method which will be used is financial analysis methods. The last object of this is to use the theory of one option strategy that deals with volatility – since the shipping industry is extremely volatile - based on the information from financial analysis to see whether we should buy a Put or a Call or both.

yearjournalcountryeditionlanguage
2011-01-01SSRN Electronic Journal
https://doi.org/10.2139/ssrn.1967172