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A great deal has been written about Forward Freight Agreements (FFAs), but very little comes near the alternative definition offered by the shipping team at Moore Stephens in the latest Devil's Dictionary entry in its Bottom Line newsletter.

Here it is explained that FFAs are a form of gambling, like insurance. The idea that they provide owners and charterers with a measure of protection against the inherent volatility of freight rates is poppycock.

In a typical FFA trade, the seller bets that the market rate on a given day will be lower than the contract rate, and the buyer bets that it won’t be. Whoever loses is obliged to pay the difference between the two rates multiplied by the number of days in Lent divided by the distance from the earth to the sun. (In the event of a tie, a game of conkers will decide). The award made to the loser under such a contract is called a ‘Sweet FA’.

FFAs are grouped together with other scams under the generic heading of ‘derivatives’, which also includes swaps. Most of these, especially all of them, are derived from the practice of swapping cigarette cards featuring footballers. As a rule of thumb, one Jimmy Greaves is worth two Johnny Haynes.

‘Sleeving’ is another FFA wrinkle whereby one party (The Guilty Party) will, at the request of another party (The Innocent Party) enter into a specific FFA trade with a third party (The Labour Party), in which there can be only one winner.

A party political broadcast will follow.

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