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Tuesday, November 16, 2010

An open question from a reader

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Anonymous said...

Hello VS-

I had a phone discussion with a shipbroker today, and he was telling me about the company and what not. He informed me they have an operations division where they take a "position". What does they exactly mean in the shipping world? I know in Wall Street for instance, that means a company puts of their own money on stock investment.

unquote

Anyone answer what it means to 'take a position' in shipping...?











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9 comments:

  1. AnonymousNovember 17, 2010 at 2:04 AM

    sleepless nights, high blood pressure, tendency to switch to psychopath mode with wife. Ahh, the joys of capitalism!!!

    ReplyDelete
  2. The Virtual ShipbrokerNovember 17, 2010 at 2:42 AM

    mmm....interesting

    Yes 'taking a position' can be stressful. Taking a position basically means 'trading' - or going long or shot in ships or cargoes.

    It can be even more stressful if you have to do it week in week out for years on end. Its like one is on war footing most of the time.

    I always prefer/ed fixing company tonnage personally.

    Balance is key. Occassional long sebaticals is also key. Good management is key. Flexible work practices is key (most men and companies are bad stress managers - its a culture problem)

    The stress of trading week in and out made me take up meditating - and that helps too (Thats a whole new book).

    Anon - I hear ya brudda!

    VS

    ReplyDelete
  3. szNovember 17, 2010 at 4:33 AM

    Freight trading..

    ReplyDelete
  4. AnonymousNovember 17, 2010 at 7:47 AM

    "Taking a position basically means 'trading' - or going long or shot in ships or cargoes."

    Could you expand on this? Who are they 'trading' with?

    How does a company go long or short? Once again, I understand this in Wall Street terms, so if it is similar you can go off that analogy. From my understanding Operations takes over after the shipbroker has secured a contract between the ship owner and cargo owner. So I am not seeing where taking a position comes into play.

    Thanks

    ReplyDelete
  5. The Virtual ShipbrokerNovember 17, 2010 at 12:08 PM

    Hi there

    I suggest you read 'inside shipbroking' where I explain the role of a 'freight trader' also known as a 'shipoperator".

    Its a big topic

    Cheers
    VS

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  6. AnonymousNovember 22, 2010 at 11:11 AM

    A company has to trade even with shipbrokers, right?

    ReplyDelete
  7. The Virtual ShipbrokerNovember 22, 2010 at 11:57 AM

    I would say that 80 percent of all shipping deals include brokers and 20 percent are done directly (no brokers) between principals.

    ReplyDelete
  8. AnonymousNovember 23, 2010 at 2:20 AM

    Taking a position can be divided into two sections basically : A)Physical Trading (charter a vessel , sell a vessel etc) and B)Paper Market Trading (FFAs mostly). As i see you already have covered section A in some of the comments i will briefly explain section B.

    To take a position in paper market trading means to enter a forward agreement for some underlying commodity (bunkers,freight usually) either through a SWAP or an option. In trading "going long" means to buy something and "going short" means to sell something.

    ReplyDelete
  9. The Virtual ShipbrokerNovember 23, 2010 at 2:47 AM

    Yes - i cover the idea of freight trading (ships and derivatives) in 'Inside SHipbroking".

    Basically taking a position means any decision where one has 'exposure' to the markets - any markets.

    In shipping we can take positions hundreds of different ways.

    Cheers
    VS

    ReplyDelete