Full forward, layered or index-linked: choosing a booking structure
There are three basic ways to buy forward. Each trades certainty against the chance to benefit if prices fall.
Full forward cover
Book 100% of the volume at today's forward price.
- Removes upside price risk
- No benefit if prices fall
- Best when urgency is high
Layered cover (60/40)
Book 60% now and buy the remaining 40% later.
- Keeps some downside benefit
- Good when the outlook is mixed
Index-linked or spot
Price floats with the benchmark.
- Cheapest if prices fall
- Full exposure if prices rise
- Only if finance accepts the volatility
Decision support for procurement, not investment or trading advice. Market conditions change; check current data before booking.