Price Protection Program Purchasing & Hedging Guidance System

Lodestar is a guidance system for purchasing and hedging a price protection program in advance of making the offer to your customers. Most oil and propane retailers find it more efficient to make the offer to their customers in a defined time structure. Particularly if the offer is meant to capture the budget accounts in time for the new budget cycle. This strategy enhances cashflow while giving comfort to their best customers that their budget payment will never increase.

Energy market volatility can make this process an anxious one for the retailer. How do I hedge this program in advance of the offer without taking on significant risk? If I wait too long I might miss an opportunity! If I pull the trigger too far in advance I might get caught with a high priced hedge that puts me at a competitive disadvantage.

Lodestar is a purchasing guide customized to our client’s program offering. We review our client’s program offerings, the timing, and the risk tolerances and design a hedging strategy aimed at maximizing their margins while lowering their risk factors. Lodestar is literally a blue print of the strategy and the implementation of the strategy. The beauty of Lodestar is that it compartmentalizes both the timing of the hedges and the type of hedges into periods on the calendar ahead of the launch. This process engenders a discipline to execute the game plan and takes the emotion out of the buying equation.

Lodestar

Structured hedging plan
Guidance system for timing of hedges
Organizational tool
Customized to client’s goals
Disciplined strategy