Powerhouse Brokerage, LLC, is a fully credentialed broker focusing almost exclusively on managing the risks of unpredictable and potentially very expensive movements in energy prices. Our guiding principle centers on the idea that the customer–with an understanding of risk and how best to minimize its effect on profit–will do better than someone without that experience.
Benefits and challenges of working with risk belong to the customer. So, the customer needs to know what the impact of a risk decision might be. Powerhouse works to teach its clients about handling risk.
A client of Powerhouse can expect some help with the ins and outs of hedging like understanding what futures are, what options on futures are, and the difference between the two. This is important because customers who are comfortable with futures markets are more likely to be successful in their hedging program.
Oil prices are very sensitive to activities in the global economy. The way they bounce or fall, as global economics and supply/demand factors operate, demonstrates how risky controlling quantities can be, or not. Hedgers can control oil while prices fall; Hedgers can get stuck without needed oil, just watching as prices soar.
An oilman wants to defend profit margins in a volatile price environment. Powerhouse helps you learn when your activities call for hedging. We propose hedging structures and execute them on your behalf.
Setting up the risk program still requires a way to track how well you’re performing. In many cases you’ll take advantage of Powerhouse’s tracking software.
Most of us are not lucky enough to run our business without competition. And if we’re facing competition, there are plenty of ways your competitor can go after your customers or lower his costs under yours.
Some of the possibilities include protecting the value of inventory, in storage or in transit. Futures help us offer sales at a fixed price or even at a maximum. Even more interesting sales structures are possible.
Working with Powerhouse helps you learn secure ways to establish a well-managed risk program. This means staff training, regular risk management, and identification of risks and opportunities in pricing.