What is 'financial risk position' in SAP LO-AGR - SAP Agricultural Contract Management?

financial risk position - Overview

• Component: LO-AGR

• Component Name: SAP Agricultural Contract Management

• Description: The risk associated with a quantity of a commodity traded via paper or financial trades, as opposed to physical trades.

financial risk position - Details

• 
  Key Concepts: 
  Financial risk position is a term used in SAP Agricultural Contract Management (LO-AGR) to refer to the financial risk associated with a contract. It is calculated by taking into account the current market prices, the contract terms, and the expected future prices. The financial risk position is used to determine the amount of money that needs to be set aside in order to cover any potential losses that may occur due to changes in market prices.
  
  How to use it: 
  In order to calculate the financial risk position, users must first enter the current market prices and the contract terms into SAP Agricultural Contract Management (LO-AGR). The system will then calculate the expected future prices based on these inputs and generate a financial risk position. This position can then be used to determine how much money should be set aside in order to cover any potential losses that may occur due to changes in market prices.
  
  Tips & Tricks: 
  It is important to regularly monitor the financial risk position in order to ensure that enough money is set aside in case of any unexpected changes in market prices. Additionally, users should also consider other factors such as weather conditions and political events when calculating the financial risk position.
  
  Related Information: 
  For more information about SAP Agricultural Contract Management (LO-AGR), please refer to the official SAP documentation