DEFINITION of 'Baltic Exchange'

An exchange that handles the trading and settlement of both physical contracts and derivatives relating to shipping and maritime transportation. The Baltic Exchange provides daily prices for freight, and tracks shipping costs through several indexes. Traders use these indexes to settle forward freight agreements (FFAs), which are freight futures contracts.

BREAKING DOWN 'Baltic Exchange'

The Baltic Exchange was founded in 1744 in London. It publishes the Baltic Dry Index (BDI), which provides pricing information on shipping various cargo types along different routes. The index is used by economists and investors to determine the demand for shipping versus the total shipping capacity.

RELATED TERMS
  1. Freight Derivatives

    Freight derivatives are financial instruments whose value is ...
  2. The Jones Act

    The Jones Act is a federal law that regulates maritime commerce ...
  3. Bottomry

    When the owner of a ship borrows money and uses the ship itself ...
  4. Maritime Law

    Maritime law, also known as admiralty law, is a body of laws ...
  5. Cost, Insurance and Freight - CIF

    Cost, Insurance and Freight (CIF) means the seller pays costs, ...
  6. Assembly Service

    Assembly service refers to the combining a number of small shipments ...
Related Articles
  1. Insights

    Bulk Shipping Companies Struggle As Markets Soften

    The "soft" dry bulk shipping market that confronts shipping companies is a result of lower demand from China, and an excessive amount of bulk ships.
  2. Investing

    Shipping Stocks Encounter Volatility

    Unusually high demand for Capesize vessels to transport iron ore to China means it has not been smooth sailing for all shipping stocks.
  3. Investing

    Major Companies That Lose Money On Shipping (AMZN)

    We look at some of the big companies in the home delivery business that have high shipping costs and how they mitigate this.
  4. Insights

    Is Free Shipping Worth It?

    Should you buy more just so you can save on shipping?
  5. Trading

    6 Weird Futures You Can Trade

    From trading based on weather to the next Hollywood blockbuster, these new derivatives show the investing world's innovation.
  6. Investing

    Bulk Carrier Vs. Container Vs. Tanker: Exploring the 2016 Shipping Market (C)

    Read about the divergent fates of oil tankers, dry bulk carriers, container ships and other seafaring vessels in the 2016 shipping market.
  7. Insights

    Can Amazon Sink Ocean Freight Competitors?

    The only question is, how long will it take Amazon to put the ocean freight market in a tailspin.
  8. Personal Finance

    7 Tips For Avoiding Shipping Costs When Shopping Online

    Before clicking on that purchase, make sure you're getting the best deal possible.
  9. Investing

    Looking to Invest in Oil Tankers? Try These 3 Stocks (NAT, SFL)

    Obtain information on the oil shipping industry, and discover three of the most widely traded oil tanker stocks to obtain exposure to oil shipping.
  10. Investing

    Key Developments In Air Delivery And Freight

    Keep an eye on these industries with the Dow Jones Transportation Average.
RELATED FAQS
  1. What are the costs for Free On Board (fob) shipping freights?

    Find out about free on board shipping, the obligations of parties involved, and the costs each party must assume. Learn about ... Read Answer >>
  2. What is the difference between CIF and FOB?

    Learn about the differences between FOB and CIF international trade agreements and the advantages and disadvantages for sellers ... Read Answer >>
  3. What is the difference between derivatives and options?

    A derivative is a financial contract that gets its value from an underlying asset. Options offer one type of common derivative. Read Answer >>
  4. What is the Difference Between a Forward Rate and a Spot Rate?

    The forward rate is the settlement price of a forward contract, while the spot rate is the settlement price of a spot contract. Read Answer >>
  5. What is the difference between a bill of exchange and a bill of lading?

    Understand what a bill of exchange and a bill of lading are and the different purposes they each serve as documents used ... Read Answer >>
Hot Definitions
  1. Investment Advisor

    An investment advisor is any person or group that makes investment recommendations or conducts securities analysis in return ...
  2. Gross Margin

    A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. ...
  3. Inflation

    Inflation is the rate at which prices for goods and services is rising and the worth of currency is dropping.
  4. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  5. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  6. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
Trading Center