Total Risk Management in the International Oil and Derivatives Market

Course

In Oxford, Uk and Singapore ((Indicate))

£ 3,185 + VAT

Description

  • Duration

    5 Days

Suitable for: Trading managers and those managers to whom trading groups report, personnel responsible for monitoring and reporting the activity of the trading group to senior management within the organization and controllers, financial, back and middle-office personnel, compliance officers.

Facilities

Location

Start date

Oxford, Uk (Oxfordshire)

Start date

On request
Singapore ((Indicate))

Start date

On request

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Course programme

Total Risk Management in the International Oil and Derivatives Market

Course Summary
This course provides a comprehensive summary of the markets together with the techniques and range of trading instruments that are typically employed. The primary focus is the identification and management of the wide variety of risks that arise from the trading activity. The purpose is to enable delegates to design, critique and implement a control and monitoring regime within their own trading organisation; information from which could be utilised to report to senior management. Case studies are used to learn the techniques involved, which will be reinforced in syndicate groups where risk arising from a portfolio of positions is assessed.
Case studies will address each technique used in the management of risk. A continuous theme case study will also allow each syndicate to manage a portfolio of their own group positions. It is recommended that delegates should have attended TR1 or have a reasonable working knowledge of the subjects covered in that course.
Course Summary
The course commences with a recap of the markets and trading techniques, the instruments used, and the methodology of trading oil and derivatives. Within each trading area the risks are identified and available management tools are discussed in detail. The theory and mechanics of advanced instruments including swaps, CFDs, traded and OTC option are explained and the application of VaR in assessing a variety of risk is discussed in detail. Along with price risk, other areas of exposure will be addressed such as counterparty, credit exposure, trading limits and mark to market in-house position management.
Overall delegates are trained in the concept of identification, management and reporting of the total risk confronting their trading group.
Case studies will address each technique used in the management of risk. A continuous theme case study will also allow each syndicate to manage a portfolio of their own group positions.
Please note: a laptop and up-to-date version of Office would be an advantage in order to engage in market data; however it is not essential.
What you will learn

  • The oil trading markets covering physicals, forwards, futures, swaps and traded and OTC options
  • How to assess and monitor credit lines and use VAR in assessing a variety of risks
  • Trading methodology as it relates to the identification and management of price risk
  • How to structure credit and counterparty risks and implement a credit management programme
  • Operational and market risks
  • Futures, traded options, OTC swaps and options
  • How to monitor and confirm trading positions and calculate P&L by marking to market
  • Freight risk management
  • Use the forward and futures markets to manage price risk including the use of EFPs
  • Application of Value-at-Risk techniques to assess trading exposure and position limitss
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    Introduction to Risk
    Understanding the Oil Trading Markets

    • Physicals
    • Forwards
    • Futures
    • Swaps and CFDs
    • Traded and OTC Options

    Design and Implementation of a Credit Management Policy

    • Counterparty evaluation/selection
    • Assessing and monitoring credit lines
    • Use of VaR is assessing credit lines
    • Market to market exposures
    • Performance risk
    • Financial security

    Market Risks

    • Liquidity
    • Volatility

    Exchange Traded Options and Futures

    • Risks and obligations of buying versus selling
    • The impact of margin funding on cashflow

    OTC Swaps and Options

    • Risks and obligations of buying versus selling
    • The Impact of Margin Funding on cashflow
    • The use of Freight Forwards

    Position Risk

    • Establishing trading limits
    • Monitoring trading positions
    • Market to market - P&L
    • Portfolio management
    • VaR - value at risk

    Case Studies and Exercises

    • Price Risk
    • Hedging Risks
    • Arbitrage
    • Generating the Forward curve
    • Swap valuation
    • Option Valuation
    • Margin Risk
    • Freight Forwards
    • Use of VaR on individual and group positions
    • Use of VaR on credit exposure
    • Option obligations and exposures

Total Risk Management in the International Oil and Derivatives Market

£ 3,185 + VAT