Commodity Derivatives

Description

Effective commodity price risk management is becoming a critical differentiator of business performance for any company producing, trading, consuming or using commodities as part of their manufacturing or distribution process. Price volatility and increasingly complex commodity markets are the main influencing factors and companies that proactively and efficiently manage their commodity price risk will gain a competitive advantage over their peers especially when it comes to profit margin. Bankers, trade financiers and investors alike can also benefit from the vast risk appetite opportunities in commodities.

This practical training course has been designed to provide delegates with a comprehensive overview of the commodities markets, hedging strategies and risk management techniques to effectively manage commodity exposure. The first part of the programme is an introduction to the main commodity asset classes, their market structures and the main players in the commodity markets. It also introduces the concepts of derivatives instruments used in commodity trading.

The second part of the programme focuses on how to manage commodity price exposure through hedging techniques using exchange traded and OTC derivatives. Drawing upon numerous examples, and through the use of industry-specific case studies and workshops, participants will learn several techniques for dealing with the scope and complexity of commodities trading and risk management. The course also explores the investment vehicles available for accessing commodity exposure and the financing options in the commodities sector, including: royalties and streaming; project finance; corporate facilities; trade and export finance.

Practical learning:
The training will comprise a combination of classroom-based teaching combined with real-life case studies and workshops to gain practical exposure to key principles and concepts.

London Metal Exchange site visit:
To reinforce the learning in the practical context, participants will have the opportunity to witness open outcry trading during a site visit to the LME during the course.

What you will learn

• The mechanics of the main commodity markets including: precious metals; base metals; energy; bulk commodities; agricultural and softs
• Hedging techniques for the different commodities sectors
• Techniques to manage commodities risk exposure
• Commodities exchange-traded and OTC derivatives and their applications in risk management
• Methods for de-risking commodities financing activities specific to project finance, trade finance and reserve base lending
• Selecting investment strategies appropriate to market conditions