Oil Trader Academy
MODULE 2: ADVANCED TRADING & PRICE RISK MANAGEMENT
20-24 August 2012, ICE Futures, London, UK
MODULE 2: DAY 1
Fundamentals of oil and gas
Basic principles
- Upstream marginal and average costs
- Capital intensity
- Exploration and Production
- Crude oil characteristics
- Refining
- Oil industry structure
- Oil price volatility
The geography of oil and gas
Oil demand
- Global demand growth
- Shifting balances between OECD and Non-OECD
- The changing balance of products
Oil Production
- Major producing regions
- Production trends
Oil trade
- Major oil trade flows
OPEC
- The role of OPEC
Modelling the oil market
- Why do we want to model the oil market?
- Modelling demand
- Oil price determination
- Oil inventories
Oil market outlook
- What drove oil prices to $150/bbl in 2008 - Futures or fundamentals?
- What stopped the collapse early in 2009?
- What is driving the price rebound?
- Where will oil prices go from here?
- Is oil price stability possible?L TRADER ACADEMY
MODULE 2: DAY 2
Structure of Course
- Analysing Oil price behaviour to aid decision making and timing around physical inventory and or hedging and lifting windows
Advanced Analysis and interpretation of Oil Price Behavior
- Overview of oil price behavior
- Forward curve analysis for European Oil markets
- Recap of key benchmarks
- Technicals Analysis of oil futures benchmarks
- Analysis techniques for Platts Physical market data
- AV numbers and Pivot Points (CACT)
- Key fundamental analysis factors and tools
- News and information tools to aid timing of trading decisions
Analysis Scenarios
Application in case studies of Analysis Tools
MODULE 2: DAY 3
Crude Oil Markets and Instruments: Physical and Financial Trading
- Forwards, swaps, exotic swaps (extendable, double-up), basis swaps, options, Asian options, EFPs
- Refined Products Markets And Instruments: Physical and Financial Trading
- Trading ‘crack spreads’, refineries as ‘derivatives’
- Forwards, swaps, basis swaps, options, strips of options, Asian options, crack spread options
Weather, Freight And Emissions Markets - Their Impact On Oil Markets
- Temperature measures: cooling degree days and heating degree days
- Hybrid products based on weather and other underlying assets
- Emissions markets
- Freight routes and markets
Types of strategies and approaches
- Strategy case studies: ICE Brent vs ICE WTI
- Strategy case studies: Urals vs Brent
- Strategy case studies: Brent vs Dubai
Hedging to Save Money
Strategy Workshop: End User, Producer, Utility, Physical trader scenarios
- Case Study: Freight rate trading and hedging
Options & Risk Management Approaches
- Using energy options: hedging & speculation
- Review of option types
- Understanding option payoffs, hedge financing risk management
MODULE 2: DAY 4
Reuters Trading Laboratory
- Managing the Trading Emotions
- Trader mindsets
- Trading plans and removing the emotional factor
- Taking a loss - Taking a profit
- Communication skills
- Market conspiracy - you versus the market
Trading Room Practicals & Scenario Based Trading Games
- Each delegate will have a Reuters system set-up for the oil markets and will execute both OTC and futures market orders reacting to real-time scenarios presented using a PC Based trading simulation exercises
MODULE 2: DAY 5
Strategic and Tactical Issues Around Hedging with Energy Derivatives
- Understanding operations and entity-wide objectives
- Evaluating the impact of indication vs hedging. Payoffs under different scenarios
- Evaluating the use of derivatives to control market risk and linking use toenity-wide and activity-level objectives (the risk matrix)
- Defining risk management activities and terms
- Designing Policies and Procedures Around Market Risk, Credit Risk And Operational Risks
- Communicating and enforcing the policies
Risk Management
- Understanding and interpreting ‘at-risk’ measures, VaR
- Overview of methodologies: Analytic, Monte Carlo and historical simulation
- Enchancing exposure reports with risk analysis
Stress Tests In Energy Markets
- Stress tests as a complementary tool to VaR and other market risk measures
- Case studies selecting appropriate Stress Tests for various scenarios
- Case studies working through possible stress tests for your organisation
- Types of stress tests and main applications
- Integrating liquidity, credit and operational risk in the formal risk management process
Value at Risk Measurement
- Running of VAR risk simulation using online Value at Risk system. (Hyper-Rig and Aspect)
- Case study to calculate operating the correct inputs and output parameters
- Risk Report design and formats
INTRODUCTION PROGRAMME MODULE1 LECTURERS REGISTER NOW