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of measurement (kilos, ounces etc). The net position in gold and gold derivative must then be converted at the current rates into Australian dollars.
(2) When calculating the gold net open positions, the long and short positions in a gold contract or gold derivative may be offset.
(3) Where the interbank market price for gold is denominated in a foreign currency, a Market Participant with an open position in gold and gold derivative:
(a)        must calculate an Australian dollar equivalent amount of:
(i)         exposure to the gold price; and
(ii)       its exposure to a foreign currency; and
(b)       may net the exposure to a foreign currency against exposures to the same foreign currencies arising from the Market Participant's other activities.

Part A3.23 Commodity position risk amount

A3.23.1  Nature of Commodity position risk amount
The Commodity position risk amount in relation to a Market Participant's Commodity positions is the absolute sum of the individual position risk amounts for Commodity positions calculated using the method of calculation set out in this Annexure 3.

A3.23.2  Overview of method

(1) The standard method is the main method for measuring the Commodity position risk amount. This is supplemented by other methods, the use of which largely depends on the Financial Instruments in which principal positions are taken.

(2) In calculating the Commodity position risk amount, the following methods must be used.
Table A3.4: Overview of methods
Nature of Positions                   Standard Method                                       Margin Method                                                                   Basic Method
Physical (not Commodity Derivatives)  Yes                                                   No                                                                              No
Non-option Commodity Derivatives      Yes, if converted to Commodity equivalent positions.  Yes, if exchange traded and margined and not calculated under any other method  No
Commodity                             Yes, if satisfy relevant criteria.                    Yes, if exchange traded and margined and not calculated under any other method  Yes, if not calculated under any other method
options

(3) The funding of Commodity positions may expose a Market Participant to interest rate or foreign currency risk and, if so, the relevant positions should be included in the calculation of the debt position risk and Foreign Exchange position risk.

Part A3.24 Standard method—Commodity position risk

A3.24.1  Application
(1) Physical Commodity positions must be included in the standard method.
(2) Commodity Derivative positions other than Options may be included in the standard method if the positions are converted to Commodity Equivalents according to Part A3.27.
(3) Commodity Derivative positions which are Options may be included in the standard method only if they are purchased positions or if they are written positions which are exchange traded and subject to daily margin requirements and the positions are converted to a Commodity Equivalent according to Part A3.27.
(4) If the above criteria are not met, the Option must be treated under one of the