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Risk Management: Today's Strategies & Tomorrow's Opportunities in Electronic Grain Trading

Learn about the benefits and challenges of electronic trading in grain markets and how it can help in risk management. Explore global agricultural exchanges and strategies for hedging grain prices. Contact us for more information.

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Risk Management: Today's Strategies & Tomorrow's Opportunities in Electronic Grain Trading

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  1. USDA’s 2011 Agricultural Outlook Forum Today’s Strategies & Tomorrow’s Opportunities Electronic Trading and the Globalization of Grain Markets Prepared by: Charles Whitman Founder and CEO, Infinium Capital Management February 24, 2011

  2. Intro “The revolutionary idea that defines the boundary between modern times and the past is the mastery of risk: the notion that the future is more than a whim of the gods and that men and women are not passive before nature…. By showing the world how to understand risk, measure it, and weight its consequences, they converted risk-taking into one of the prime catalysts that drives modern Western society”

  3. Risk Management Risk Management Understanding = Major Business Edge Hedge Away Risks Focus On Core Competency

  4. Benefits of Electronic Trading Transparency Access- 24 Hour Markets Increased Volume & Liquidity Tighter Bid/Ask Spreads Faster Product Adoption Instant Reporting & Risk Management

  5. Accessibility Due to Electronification

  6. Global Ag Exchanges Africa South African Futures Exchange Asia Agricultural Fut Ex of Thailand Bursa Malaysia Central Japan Commodity Ex. Kansai Commodity Exchange Korea Exchange Singapore Exchange (was SIMEX) Tokyo Grain Exchange Australia Australian Stock Exchange Canada ICE Futures Canada China Dalian Commodity Exchange Zhengzhou Commodity Exchange North America Chicago Board of Trade Chicago Mercantile Exchange ICE Futures US Softs Kansas City Board of Trade Minneapolis Grain Exchange New York Mercantile Exchange India Multi Commodity Ex. of India National Cmdty & Derivs Exch. Latin America Bolsa de Mercadorias e Futuros Mercado a Termino Buenos Aires Rosario Futures Exchange Europe NYSE LIFFE - London NYSE LIFFE - Paris Russian Trading System Turkish Derivatives Exchange MFAO Olive Oil Exchange

  7. Accessibility Due to Electronification

  8. Accessibility Due to Electronification

  9. Challenges Technology (Safe, Stable & Fair) Error Prevention Scalability & Bandwidth Equal Direct Access Fair Access to All Market Participants Dark Pools Willingness to Change Hesitant to push the button Some parties have a vested interest in holding on to the “old” way of trading

  10. Risk Hedging Grain prices Energy prices Interest rates Margin Hedging Benefiting From Electronic Ag Markets

  11. Benefiting From Electronic Ag Markets Strategy Examples Futures Futures Spread Cash/Future Swap – EFP (Exchange for Physical) Options RFQ (Request For Quote) Outright Options CSO (Calendar Spread Options) Inter-Commodity Spreads (and Spread Options)

  12. Thank You Business Development 312-770-1912 600 W. Chicago AveSuite 300NChicago, IL  60654 www.inifiniumcm.com

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