Home > Chartering > Unpriced Component
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Configuration flag CFGEnableGeneralUnpricedComponent must be enabled. This is a ‘hidden’ flag. |
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On a Cargo, VC In, Time Charter In, or Time Charter Out contract, click Add Unpriced Elements.
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On the Unpriced Component form, do any of the following:
Add remarks to the field at the top (up to 512 characters).
Click + to add a set of fields for each component and complete them.
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General Grid
In the General section, you can define the Unpriced Component and its market curve details.
The Unpriced Component form includes Settlement Curve and Forward Curve fields, enabling users to select two symbols in case the settlement curve does not have forward rates.
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You can create the following Components:
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Component | Subtype |
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Hire | The different Hire periods |
BOD (Bunker on Delivery) | Fuel types |
BOR (Bunker on Redelivery) | Fuel types |
Ballast Bonus TC | N/A |
Ballast Bonus Bunker | Fuel types |
Averaging Period
On the Averaging Period Grid, specify a time window during which the average market price is calculated.
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Fill Days: When Holidays or All option is selected, make sure that holidays have been specified in the Data Center Holiday Calendar so those dates will populate based on the Fill Rule specified.
Fill Rule: The Fill Rule specifies where the price is to be taken from. When Last Spot Pricing is selected, the price will be the last spot price on the curve on or before the Event Date.
Structure
Select the Structure check box to use the Structure table to define the component's price as a function of the index price. The calculation uses the formula: (Index price - Level) * (Correlation) + (Offset) = Unpriced Component Price.
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Range: Enter a range using inclusive [] and exclusive () brackets. In the below examples, 1 and 5 can be replaced with any number:
(1,5) or (1:5) = 2, 3, 4
The range starts at 1, but does not include it, and ends at 5, but does not include it.(1,5] or (1:5] = 2, 3, 4, 5
The range starts at 1, but does not include it, and ends at 5 and includes it.(1,) or (1:) = 2 through infinity
The range starts at 1, but does not include it, and ends at infinity.(,5) or (:5) = infinity through 4
The range starts at infinity and ends at 5, but does not include it.
Correlation: Any Correlation entered in the General grid of the Unpriced Component will affect the Index price, subsequently affecting the Unpriced Component price when using the Structure table. This can result in the double application of a premium.
Structure Validation
Click the Validate button to check the calculation and ensure no two ranges overlap. If there are no errors, the Structure Validation form appears:
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The Contract column shows the Unpriced Component’s price for the corresponding Index price.
Index-linked Structure
The checkbox Apply Corr. to Days is available when the Structure checkbox is selected. This checkbox accounts for correlation values in the pricing structure, improving your ability to assess market risk. When applied, VIP adjusts the calculated Exposure Days with a formula that subtracts the correlation value in the structure to better reflect the number of days in the period exposed to the market.
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Embedded Derivatives Grid
The Embedded Derivatives grid is for reference only; values here do not affect any calculations.
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After you close the Unpriced Component form, you can click Edit Unpriced Elements to edit the Unpriced Components.
Invoicing Unpriced Components
On the Freight Invoice, you can view Unpriced Components, override the Market Rate, and view the Unpriced Component Rate Breakdown report.
On Voyage Details, click Freight and then click Freight Invoice.
Type a Counterparty for the Freight Invoice. The Unpriced Components tab appears on the Cargo grid:
Do any of the following:
To override the Market Rate, edit the Market Rate field.
To view the Unpriced Component Rate Breakdown report, right-click the line and click Rate Breakdown.
Unpriced Component Rate Breakdown
The Unpriced Component Rate Breakdown report shows you a list of days and their corresponding market rates. For BAF components, pricing calculation details also appear.
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