Hedging Training Courses


EssentiAls of Commodity Risk Hedging
EssentiAls of Commodity Risk Hedging

EssentiAls of Commodity Risk Hedging

Dive into a comprehensive training course focused on commodity risk hedging. Participants will gain insights into the operation of the commodity market, explore various types of commodities, and understand the main indices. The course outlines the principles of risk hedging, examines types of risks, and identifies key players in the commodity market.

 

Engage in in-depth learning about futures and forward contracts, their roles, and the factors influencing their prices with practical examples on sugar hedging. Explore the world of commodity swaps and options, gaining insights into their definition, operation, and role in risk management, illustrated through detailed real-life cases. This program offers a blend of theoretical knowledge and practical insights, ensuring participants are equipped to navigate the complex landscape of commodity risk hedging effectively.

Ref: EOCRH-205


Learning Outcomes

  • Know the different categories of commodities.
  • Understand the hedging issues from the perspective of the industrial producer and consumer.
  • Understand the factors influencing the value of a futures contract on a commodity.
  • Understand the operation of a commodity swap.
  • Know how to use a futures contract, a swap, and an option on commodities for hedging purposes.

Who Should Attend

  • Portfolio Manager
  • Industrial producer or consumer of commodities
  • Financial Manager
  • Back Office Manager
  • Internal Control Manager

Duration

  • 2 days or 14 hours

Price

  • €2050 + VAT for one participant.
  • €1640 + VAT each for a group of 2 or 3 participants, only with group registration.
  • €1310 + VAT each for groups of more than 3, only with group registration.

Tailored Training Solutions

  • We offer the option to collaboratively develop customized programs.
  • If you don't find precisely what you're looking for, we are here to assist you in constructing the perfect solution for your organization.
  • Any of our training courses can be delivered just for your team.
  • We can also co-create bespoke programmes, so if you can't find exactly what you need, we can help you build the right solution for your organisation.

Training Program

I. The Commodity Market

  • Understanding its operation.
  • Exploring the typology of commodities.
  • Learning about the main indices.
  • Discerning the differences between commodities and financial assets.
  • Practical Case: 
    • Review and commentary on the recent price evolution of various commodities

II. The Principle of Risk Hedging on Commodities

  1. Definition of risk hedging.
  2. Examination of the typology of risks.
  3. Identification of the main indices.
  4. An analysis of the concerned parties: producers and consumers.

III. Futures and Forward Contracts

  1. Understanding futures contracts, including their definition, role, and operation, and distinguishing between spot and future prices, contango and backwardation.
  2. Examining the factors influencing the price of a future, including the interest rate, logistics and storage costs, convenience yield, and the concept of arbitrage.
  3. Delving into forward contracts.
  4. Identifying the main participants in these contracts.
  • Practical Case:  
    • An illustrative example of a hedging strategy on sugar, from both producer and consumer perspectives.

IV. Commodity Swaps

  1. Defining commodity swaps, understanding their role and function.
  2. A practical example of hedging with a swap on sugar, discussing both producer and consumer viewpoints.
  3. Exploration of other types of swaps.
  • Practical Case: 
    • A detailed example of a hedging strategy on sugar, examining the perspectives of both producers and consumers.

V. Options on Commodities

  1. Definition and operation of an option, with a focus on calls and puts.
  2. An in-depth look at the parameters influencing the price of an option, discussing ‘the Greeks.’
  3. Exploration of hedging strategies using options, with insights from both the producer and consumer perspectives.
  • Practical Case: 
    • Another illustrative example of a hedging strategy on sugar, this time focusing on options, and exploring the perspectives of both producers and consumers.





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