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triReduce Commodities
scaling technology to tap into a reviving market |
Continuing volatility in the energy and wider commodity markets and heightened regulatory scrutiny have increased demand and interest in compression for commodity swaps. For financial institutions, the regulatory capital required to maintain these transactions is also a motivating factor. Regulatory capital charges can be significantly higher for energy derivatives than other OTC derivatives. As trading increases and capital remains scarce, dealers are eager to shed unnecessary inventory.
Recognized as an innovator in the commodity markets by Energy Risk magazine, triReduce Commodities has established portfolio compression cycles in OTC oil, gas and power swaps in the range of products shown in the chart below. Compression covers both financially settled and physical contracts as well as forward starting and in-delivery trades.


The legal-entity fragmentation that is common in commodity trading inhibits the effectiveness of collateral and netting arrangements. In addition to the basic benefits of reducing counterparty credit exposure, minimizing risk-weighted assets and capital charges and reducing operational cost and risk; compression in OTC commodity trades will contain collateral exposures.

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