Rather, the contracts settle in cash against the arithmetic average price of spot freight published by the Baltic Exchange.
Such assessments for the corresponding vessel classes are used to calculate the monthly average that freight futures settle against.
The freight derivatives market for dry cargo vessels saw a big increase in traded volumes in 2021.
Middle East Gulf to China (TD3C) was the favoured tanker contract with 304,719 lots changing hands.
One lot is defined as a day's hire of a vessel or 1,000 metric tonnes of ocean transportation of cargo.