Perfectly Hedged a Practical Guide to Base Metals - by Samuel Basi

About the Book

In the competitive world of commodities trading, the margins are where you can get an edge.

"Perfectly Hedged" simplifies and explains hedging, a subject that is often viewed as highly technical, frequently misunderstood, and is the cause of avoidable, costly mistakes. Through an easy-to-follow, comprehensive book, you will obtain, and importantly retain this key knowledge that is vital to the long-term success of trading firms.

Featuring 18 chapters on:
1. Introduction to Hedging
2. What Hedging Is and Why It Is Necessary
3. How Metal Prices Are Determined
4. Hedging in Practice
5. "The Perfect Hedge"
6. Position Management
7. Physical Shipments
8. How to Become a P&L Generator
9. Hedging Errors
10. Warrants
11. Arbitrage
12. Premium Hedging
13. Foreign Exchange Hedging
14. Spread Cards
15. Initial & Variation Margin
16. Simple Option Contracts For Hedging
17. Price Participation
18. Shanghai Futures Exchange

"This is the first book I have read that walks you through the intricacies of commodity hedging in a methodical, easy-to-follow way. Finally!"
Tristan Busch, Founder, Zopco SA

Book Synopsis

In the competitive world of commodities trading, the margins are where you can get an edge.

"Perfectly Hedged" simplifies and explains hedging, a subject that is often viewed as highly technical, frequently misunderstood, and is the cause of avoidable, costly mistakes. Through an easy-to-follow, comprehensive book, you will obtain, and importantly retain this key knowledge that is vital to the long-term success of trading firms.

Unlike other industry literature, "Perfectly Hedged: A Practical Guide to Base Metals", breaks down complex concepts across 18 chapters, making it easy for middle and back-office employees to digest the information.

Highlights include straight-forward and easy-to-follow language, real-life examples, and a quiz at the conclusion of the book.

Increase your understanding of hedging and boost your confidence. Immediately apply learnings to your day-to-day work. Improve ROI and get a valuable advantage over your competitors.

Featuring 18 chapters on:
1. Introduction to Hedging
2. What Hedging Is and Why It Is Necessary
3. How Metal Prices Are Determined
4. Hedging in Practice
5. "The Perfect Hedge"
6. Position Management
7. Physical Shipments
8. How to Become a P&L Generator
9. Hedging Errors
10. Warrants
11. Arbitrage
12. Premium Hedging
13. Foreign Exchange Hedging
14. Spread Cards
15. Initial & Variation Margin
16. Simple Option Contracts For Hedging
17. Price Participation
18. Shanghai Futures Exchange

"This is the first book I have read that walks you through the intricacies of commodity hedging in a methodical, easy-to-follow way. Finally!"
Tristan Busch, Founder, Zopco SA

Review Quotes

"In a landscape where expertise is paramount and missteps can have far-reaching consequences, Basi's meticulously researched, eloquently written, and important educational work emerges as a game-changer."
Cynthia Ginsburg, Managing Director, Marex

"Perfectly Hedged is the first book I have read that walks you through the intricacies of commodity hedging in a methodical, easy-to-follow way. Finally!"
Tristan Busch, Founder, Zopco SA

"A great guide to the world of base metals for everyone in commodities, from traders to middle and back office operations."
Debankur Dey, Derivatives Clearing Operations, Morgan Stanley

"Perfectly Hedged is a thorough yet easy risk management guide going through the whole supply chain of metals."
Veli Kiiski, Head of Trading, Metycle

"A refreshing update, very clear and straight to the point. For anyone getting into metals, the book answers many questions that many I know were to afraid to ask or wouldn't have seen that far. Great for traders, operations, middle office and back office alike."
Luis Graham, Chief Operations Officer, Mitsubishi Corp.

"Until now I had been unsuccessful in finding a book that covers the practical aspect of how hedging works in the industry. I was finally lucky enough to come across this guide written by a real practitioner."
Grigoris Pachis, Risk Manager, Abalone Commodities AG

"Brilliant guide for a starter and also experienced professionals into the world of Base Metals Hedging and managing Price Risks."
Dhaval Shah, CFO & Head of Trade Finance, AfriMet Resources

"Perfectly Hedged is invaluable for anyone working at a physical trading company that hasn't worked on the derivatives desk."
William Jaede, Former Head of APAC Non-Ferrous Trading, Trafigura

"Every chapter is peppered with examples clearly translating the theory into practical illustrations, drawing on the author's experience in operations, deals, physical trading and derivatives trading."
Andrea Hotter, Special Correspondent, Fastmarkets

About the Author

Samuel began his career in 2009 at Trafigura's head office for metals in Lucerne, Switzerland. He quickly became responsible for operations of refined aluminum, zinc, and lead contracts with exposure to Europe, the Middle East, and Asia. In 2010, Samuel moved to Trafigura's US office in Stamford, CT, where he continued in a senior operations role covering refined lead, zinc, and copper contracts, focusing on North and South American business.

In 2011, Samuel was promoted to the deals (hedging) desk, where he spent time in the head office in Switzerland before he moved back to run the North American deals desk. Samuel mitigated the outright price, arbitrage (CME/LME), and spread risks for the North and South American refined and concentrates markets across all base metals and FX exposures.

In January 2012, at age 24, Samuel was promoted to become one of the youngest physical traders in Trafigura's history. During this time, he built out and traded the refined lead and zinc books for the domestic US market. He later added the South American refined lead and zinc books to his portfolio. With global exposure to imports and exports, along with building a domestic book of over 300,000mt/annum, Samuel increased the book size by 500% across his tenure at Trafigura. Following Trafigura's acquisition of Nyrstar, Samuel played a pivotal role in the marketing and integration of the Nyrstar Clarksville Zinc smelter.

In November 2019, Samuel moved to join Greenwich Metals Inc (GMI), where he built and ran the derivatives desk from the ground up. He provided an internal brokerage to hedge the entire physical book of GMI, mitigating the group's risk across refined base metals, scrap metals, concentrates, precious metals, and FX. He built a successful prop trading book and took speculative positions across base metals on both the LME and CME exchanges, FX, and precious metals. He combined his knowledge of fundamental trading, and quantitative, systematic trading, to develop both long and short-term strategies to generate significant returns. While at GMI, he was a member of the risk committee and held company-wide seminars on managing risk across various futures exchanges and products.

Samuel has a proven track record of building excellent relationships with clients, brokers, banks, and traders across the physical and derivative metal markets. His continued YOY results over the past 15 years are a testament to his abilities as a trader and the dedication of his craft.

In November 2023, Samuel took his 15 years of trading knowledge and created Perfectly Hedged LLC. Perfectly Hedged is a consultancy and training firm that simplifies and explains hedging; a misunderstood subject that is often viewed as highly technical, and is the cause of avoidable, costly mistakes.

Samuel authored the book, "Perfectly Hedged A Practical Guide To Base Metals", a comprehensive look at hedging in commodity firms. Unlike other industry literature, it is targeted to middle and back office staff, and utilizes real-world scenarios that employees will encounter on a daily basis. By pairing his book with tailored, interactive, in-person classes, employees will obtain --and retain-- key knowledge that is vital to the long-term success of trading firms.