Stress testing commodity hedges: scenarios before the market moves

A hedge that only works in yesterday’s market is incomplete. Stress testing asks what happens to the book if prices gap or implied vol jumps tomorrow.

Design scenarios desks actually discuss

Useful stresses sound like the business: oil +10%, copper drawdown, harvest delay basis blowout, vol spike into inventory season.

Parallel curve bumps and vol surface shocks reveal different failures than a single flat price shift.

Connect scenarios to hedge decisions

If a collar collapses under a realistic stress, change the structure before trading. Stress is a design tool, not only a reporting ritual.

Run stresses on the same spine as pricing

CommoHedge strategy and scenario workflows are built to keep stress views aligned with the pricing engine — so “what if” answers match live MTM logic.

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