Energy Markets & Derivatives Trading
In today’s rapidly changing and increasingly challenging world, every organization is facing more complex risks with greater severity. In a recent survey to the global risk management practices commodity price risk is in the top 5 of risks. There is hardly any company that is immune to commodity price risk. The price spike across the commodity complex during 2008 and subsequent collapse late in the year sharpened the focus on all energy exposures and inherent risk implications. Due to the impact of the extreme price movements new players ranging from governments to small companies that previously did not see enough value in hedging became active in the commodity markets as well. Next to the traditional players in the market such as producers, large industrials, traders and investment banks.
A global recovery s most likely to start in Asia and will certainly boost demand for commodities. Causing prices to increase fast and probably bring them back to levels last seen in the first half of 2008. What will be the right hedging instruments and strategies for your company to survive these expected price volatilities?
The ability to understand, track and adjust to worldwide trends and know how to manage your commodity risks can mean the difference between success and failure. In this highly interactive and intensive training course Jerry de Leeuw and Kasper Walet will share their commodity markets and derivatives expertise to talk you through all the relevant issues in depth. |
| Acquiring Insight and Knowledge of: |
- The working of processes in the energy industry
- The working of local, regional & international energy markets
- Future perspective of energy markets & trading
- Production and consumption
- The working of processes: Upstream, midstream, downstream
- Market participants and their roles
- The working of transport of energy: Shipping, grids & pipelines
- Products traded in the energy markets
- The working and applications of those products
- Pricing, benchmarks and indices
- Risks connected to the energy markets
- Standard deviation & normal distribution
- Skew & kurtosis in distribution of chances
- Correlation
- Usual trading techniques and methods
- Kinds of risk
- Risk parameters
- Hedging
- Products that is suitable for risk management
- The working, pricing and applications of those products
- Optimization of portfolios
Oil
- Supply and Demand fundamentals
- Structuring of contracts
- Fundamental Price drivers
- OTC vs. Exchange trading
- History and future of Trading
Carbon
- Koyo Protocol and post 2012
- European Emissions Trading Scheme
- Compliance vs. Voluntary Markets
- Flexible Mechanims
- Trading Platforms
- Role USA
Electricity
- Supply and Demand coming 20 years
- Impact Carbon targets on power prices
- Role renewables
- Role Nuclear
Natural Gas
- Global gas supply/ demand dynamic
- Europe, US and Asia
- The main Trading Hubs
- Price Drivers
- Fundamental supply and demand
- Competing imports of natural gas
- Fuel switching.
- Flexibility instruments
- Storage
- LNG
Coal
- Supply/demand economics
- Clean Coal Technology
- Carbon Capture Storage (CCS)
- Role China
- Freight
Trading
- Reasons to trade
- Hedging, arbitrage, speculation
- Purpose of Hedging
- Volatility reduction
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- Trading physical commodity
- Hedging of price and volume
- Short term balancing
- Demand impact on trading
- Selling or Trading
- Management tools for forecasting and portfolios
- Trading problems
- Hedging against the unknown
- Arbitrage - local and international
- Technical analysis
Spread Trading
- Why trade spreads
- Structure of Spreads
- Technical analysis and Spread Trading
- Market analysis
- Seasonal, cyclical and historical relationship
- Principles of successful spread trading
- Futures Spreads
- Locational and Calendar spreads
- Spark, Dark and Crack Spread
- Option Spreads
- Bull and Bear Option spreads
- Straddles and strangles
- Volatility Spread
Risk Management
- The Main sources of risk
- Market, credit and Operational
- Main lesson current crisis; an Integrated approach is crucial
- Risk Management Disasters and scandals
- MG, Barings, Enron Collapse, Amaranth, PVM oil
- Identification and quantification of risks
- Typical trading strategies and their associated risks
- Risk/reward strategies
- Mark-to-Market
- Value-at-Risk
- Correlation and Volatility
- Implied volatility and smiles
- Relation Spot and Forward Markets
- Demand, supply and pricing
- Inventories
- Theory Storage and Futures
- Inventories and Futures Prices
- Convenience Yield
- The Forward Value
- Backwardation and Contango
- Forecasts versus forward prices
Derivatives; Forwards, Futures and Swaps
- Forwards, Futures
- Hedging with Forwards and Futures
- Hedging with Swaps
- Fixed –for floating
- Floating for Floating Swaps
- Other types of swaps
- Options
- Plain Vanilla Options
- Why and how are options used by hedgers
- Option Pricing Formulas
- European, American and Asian options
- Hedging Options; the greeks
- Integrated physical and risk management contracts
- Swaptions
- Spread Options
- Caps and Floors
- Swing Options
- Virtual Storage
- Real Options
- Cost of hedging with options
- Options in structured deals
- Put Call parity and options strategies
- Collars
- 3 way options
- Buy downs and participation
- Flexibility in volume and time
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Workshop Facilitated by:
Kasper Walet,
Director, Maycroft
Jerry de Leeuw,
Director, Mercurious |
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