Yield Equivalent Position is a term used in the context when the position of a commodity is expressed in it’s equivalent product form. For instance, bottled oil expressed in crude oil and vice versa. This position is designed to replicate the yield or return that you would expect to receive through downstream processing, and/or to estimate the quantity of raw materials needed to fulfil sales orders.
By calculating yield equivalent position, producers and traders can make more informed decisions about which commodities to focus on, allocate resources effectively, and optimize their trading strategies to maximize their overall returns.
