Forward Freight Agreement Settlement
FFA cash-settled P/L: (Settlement index − Strike) × days × lot size.
P/L
75,000USD
Formula, assumptions, and limits
FFA settles against the published Baltic index (BDI, BDTI, etc.) averaged over the contract period. Monthly settle = average of all trading days. FFA has no physical delivery; pure paper. Hedging a physical voyage requires matching lot size × day count.
Symbol legend
| Symbol | Meaning | Unit | Source |
|---|---|---|---|
| Contract fixed rate | USD/day or USD/t | trade ticket | |
| Baltic average over period | USD/day or USD/t | Baltic Exchange | |
| Days (or tonnes) in contract | - | trade ticket | |
| Number of lots | - | trade ticket |