Derivatives in Energy Markets

With the significant rise in oil and gas prices in the last few years, it is no surprise that energy companies, banks, and hedge funds have become very active in trying to hedge their risks through OTC and exchange traded energy derivatives. This course explores the mechanics and applications of commodity forwards, futures, swaps, and options and how they are utilized in hedging strategies. It examines best practices for company risk management and ways of identifying, measuring, monitoring, and controlling risks in energy derivatives. Participants learn the role of regulators in these markets and explore recent developments in energy derivative markets through articles and case studies.

03-Sep-2008 -- 04-Sep-2008New YorkUSD$2375
NY Institute of Finance - Midtown9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ Mayra Rodríguez Valladares; ] Wed Thu Level: Intermediate
CPE Credits: 14

01-Dec-2008 -- 02-Dec-2008New YorkUSD$2375
NY Institute of Finance - Midtown9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ Mayra Rodríguez Valladares; ] Mon Tue Level: Intermediate
CPE Credits: 14

Traders, brokers, commodity specialists, bankers, analysts and associates and product specialists.
No advance preparation required.
Students will be able to:
  • Identify risks in commodities trading
  • Identify mechanics and application of energy forwards, swaps and futures
  • Evaluate risks posed by energy derivatives
  • Compare and contrast roles of key regulators
A basic understanding of derivatives
Articles written by Instructor:
http://www.worldoil.com/magazine/magazine_detail.asp?ART_ID=3149 http://www.worldoil.com/magazine/magazine_detail.asp?ART_ID=2995
Day 1 - Influences on Energy Markets and Energy Forwards

Influential Factors in Energy Markets

  • Overview
  • Oil Sector
  • Gas Sector
  • Electricity Utilities

Market Players

  • Size of market
  • Role of hedgers
  • Role of speculators and hedge funds

Risk Management in the Energy Sector

  • Risk management process
  • Special characeristics in the oil, gas, and electricity sectors

Introduction to Commodity Forwards

  • Equilibrium pricing
  • Pricing through arbitrage
  • Oil Sector
  • Natural Gas
  • Electricity storability

Day 2 - Commodity Swaps and Futures

Commodity Swaps

  • Physical versus financial settlement
  • Swap counterparty
  • Market value of a swap
  • Commodity swap price

Commodity Futures

  • Introduction to futures
  • Discussion of role of exchanges and clearing houses
  • Margin
  • Identify different energy futures and their mechanics and applications

Hedging Strategies

  • Commodity spreads
  • Basis Risk
  • Hedging Jet Fuel with Crude Oil

Regulators and Energy Derivatives

  • Recent corporate governance and price manipulation
  • SEC
  • Sarbanes-Oxley
  • Basel II's treatment of energy derivatives

Clients who register for this course will receive a complimentary 6 month subscription to the Financial Times and FT.com. The Financial Times is the world's most respected financial newspaper providing a broad assessment on finance, business and the industrial sector. Subscriptions will start within 6-8 weeks of the application process, and are limited to one per client. For questions about your subscriptions call 800-628-8088 or email uscirculation@ft.com. US and Canada enrollees only.

Lunch included for all students taking day classes.