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Course Level
Introduction
Delivery Method
Live Instructor-Led Virtual Course
Professional Development Credit Hours
10
Pre-requisites
There is no pre-requisite for this course.

"Instructor is very knowledgeable and well prepared. I enjoyed the courses. " Southern California Gas Company


Faculty

Dr. Carlos Blanco is a financial risk management expert with over 20 years of diverse experience in energy markets. He has worked with some of the largest energy and commodity market firms worldwide providing educational, advisory services and software solutions.

He is the managing director of analytic solutions for Ascend Analytics. He has advised risk groups and senior management in oil, gas, power, mining and trading firms on various matters related to the risk management process including risk policy, hedging strategy, risk model development and validation, risk appetite and risk metrics.

Dr. Blanco is an active faculty member for Mennta Energy Solutions since 2004, and he has conducted a wide range of energy derivatives hedging, pricing and risk management seminars worldwide. A frequent conference speaker and writer, he has coauthored over 150 articles for Energy Risk Magazine, Commodities Now, Energy Metro Desk, Oil and Gas Journal and others.

He is a former VP Risk Solutions at Financial Engineering Associates, Inc (a MSCI/BARRA Company), where he managed the market risk suite of products as well as the firm's product support and professional services group. He also taught finance at the University of California, Berkeley, and the ABN AMRO Academy. He is a former VP Risk Solutions at Financial Engineering Associates, Inc (a MSCI/BARRA Company), where he managed the market risk suite of products as well as the firm’s product support and professional services group. He also taught finance at the University of California, Berkeley, and the ABN AMRO Academy. Dr. Blanco was recently awarded the GARP Sustainability and Climate Risk (SCR) certification.


Accreditations

NASBA: Mennta Energy Solutions is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org

CPD Certification Services: The CPD Certification Service works with Mennta Energy Solutions to ensure valuable knowledge is structured to complement the universal guidelines of Continuing Professional Development. Mennta Energy Solutions courses are approved by CPD at one credit per training hour.

BAC: Mennta Energy Solutions is pleased to be endorsed by the BAC for Independent Further Education as a Short Course Provider. Endorsement covers courses delivered in the UK only.

GARP: Mennta Energy Solutions is registered with GARP as an Approved Provider of Continuing Professional Development (CPD) credits.

Introduction to Derivatives Markets, Hedging and Risk Management (VIRTUAL) - DPH1V


Course Schedule

Date Time Location Price* Registration Deadline**
6-8 Dec 2022
Register
9:00AM - 12:00PM (Singapore)
Zoom: Asia-Pacific
USD 1,630 (DPH1V-VILTAP22-12)
CONFIRMED!
23-25 Jan 2023
Register
10:00am-1:00pm (New York) / 15:00-18:00 (London)
Zoom: Americas to Europe
USD 1,630 (DPH1V-VILTNA23-01)
23 Dec 2022

*Prices do not include VAT, GST, or any other local taxes. All applicable taxes will be added to the invoice.
**Please register by the deadline to help us ensure sufficient attendance and avoid postponing the course.


Course Summary

This virtual instructor-led course provides an overview of energy derivatives and physical markets as well as the main instruments traded by the main market participants.

The course explores physical and paper transactions as well as the pros and cons of commonly used exchange-traded and OTC products. Delegates learn how to mitigate market risk of energy exposures using futures, forwards and swaps with multiple case studies.  The course will also provide an overview of option contracts and hedging strategies using options and simple structures.

This applied course also covers strategic and tactical issues for alternative hedging strategies used by producers and end-users. Practical case studies show how to evaluate hedge strategies under different risk dimensions in the context of achieving business goals.

Delegates also learn best practices for oversight of derivatives activities, the trade lifecycle and valuation of energy derivatives.

Please note: an up-to-date version of Microsoft Excel is required in order to engage in market data.


Who Should Attend?

  • Market risk managers
  • Energy traders
  • Trading managers
  • End-users of derivatives in corporations
  • Credit risk analysts
  • Risk consultants
  • Risk and audit committee members
  • CFOs and treasury managers
  • Finance department personnel
  • Compliance managers
  • Middle and back-office personnel
  • Treasurers and treasury analysts
  • Chief risk officers

Course Content

Overview of Energy Physical and Financial Markets

- Overview of energy market participants
- Case study: Risk dimensions in energy markets: Market, Credit, Liquidity, Operational, Model, Volumetric
- Risk tolerance, appetite, and forward-looking risk metrics to measure and manage risk
- Trading mechanisms: Exchange-based and OTC trading (Billateral, OTC Clearing)
- Long and Short: Volumetric vs. Price Exposures
- Physical vs. Financial settlements
- Entering and exiting bilateral derivatives positions: Market, limit and Trade at Settlement (TAS) orders

Spot Prices and Forward Curves in Energy Markets

- Spot (Cash) Prices: Main Characteristics
- Forward Price Curves: Contango and backwardation
- What does the forward curve tell us?
- Case study: Analysis of movements in Crude Oil and Gas forward curves
- Building Forward Curves for Mark-to-market and Risk Analysis
- Data sources for forward curves. Pros and cons of alternative sources.
- Forward curves vs. Price Forecasts
- Arbitrage in Contango and Backwardated Markets
- Case study: Arbitrage opportunities using land and floating storage
- Price Volatility in Energy Markets. Introduction to historical and implied volatility.

Hedging with Physical Forwards and Futures

- Fixed price vs. Index physical forward contracts
- Case Study: Hedging physical purchases and sales with fixed price forwards
- Introduction to futures contracts
- Hedging with Futures: Main considerations
- The Mark-to-market Process. Clearing, collateral and margin issues
- Excel case study: Mark-to-Market and Margin calculations for a futures contract
- Valuation of forward contracts and swaps using forward curves in Excel
- Case study: Hedging revenues with physical forward vs. futures
- Excel case study: Creating a payoff diagram for linear hedge instruments with Data tables.

Hedging with Swaps and Futures

- Fixed for Floating Swaps: Key contract components
- Differences between futures and swaps
- Case study: Shipping company hedging bunker fuel purchases with swaps
- Hedging a cargo purchase and sale with swaps and futures.
- Case study: Unwinding a futures hedge to match average pricing in physical contracts
- Comparative analysis of hedging with forwards, futures and swaps

Using Energy Options: Hedging and Speculation

- Review of options types: Calls, Puts
- Buying and Selling Options: Understanding option payoffs
- Why use options?
- Intrinsic and extrinsic value of an option
- What are the main drivers of option premiums?
- Setting revenue floors and cost ceilings (caps) with options
- Individual options vs. Strips of Options: Examples
- Case Study: Hedging against price spikes with options
- Selling options: Covered and Naked positions
- Case study: Mexico's oil hedging programme

Strategic and Tactical Issues around Hedging with Energy Derivatives

- Best practices in designing and effective hedging program
- Evaluating the impact of inaction vs. hedging. Payoffs under different scenarios.
- The role of risk and regret in designing and evaluating hedging strategies
- Case Study: Analysis of main hedging strategies used by airlines
- Hedging alternatives and Key Risk Indicators (KRIs)
- Case study: KRIs and trade-offs from alternative hedge strategies for oil producer
- Best practices in derivatives oversight: Risk policies and procedures

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