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Global Financial Markets Intelligence

Global Financial Markets Intelligence

Analysing and Managing Commodity Risk

Addressing the challenges of managing the risks that may arise through proprietary and counterparty trading in the commodity markets sector

23-24 Nov 2017
London, United Kingdom

Why You Should Attend

Analysing and Managing Commodity Risk

To ensure we meet your expectations and maximise your return on training investment, we favour a classroom/workshop style set

The two day course addresses the challenges of managing risk across the commodity asset class as may arise through proprietary and counter-party trading. As an asset class Commodities are unique in having physical characteristics and other dimensions affecting both their value and their risks. Unlike bonds or equities which can be “delivered” electronically anywhere in the world in seconds and which are generic, commodities have physical and geographic characteristics. To where jet fuel is delivered, for example Rotterdam versus New York Harbour, affects its price. Using electricity delivered in East Texas to hedge electricity to be consumed in West Texas might appear delta neutral at an aggregate level but may still lead to losses. The quality of crude oil again affects its price: Hedging Nigerian Bonny light using the liquid contract in West Texas Intermediate might appear useful but means speculation in the quality differential. Unlike other asset classes, commodities incur physical storage costs including insurance. Unlike other asset classes, commodity market participants may have more than purely financial objectives. They may be producers; they may be consumers or they may be central bankers protecting a nation’s credit rating. 

Although some securities such as bonds usually have a maturity date, commodities do not mature but they are likely to be consumed by consumers, business and industry. Agricultural commodities may even deteriorate and degrade if stored too long. The unique characteristics of commodities as an asset class means that in order to manage the risks of trading, the basic conditions of supply and demand, structure, behaviour and performance of the various sectors involved in this asset class must be understood.

How will you benefit?

• Learn about commodity markets, its instruments and the role of exchanges, warehouses & storage

• Gain an understanding of hedging with commodity futures and options

• Improve your hedging efficiency, statistical and micro-hedging

• Appreciate how to effectively manage and report commodity risk

• Understand risk metrics for commodities: position limits, VaR & GML’s

About your expert trainer:

Dr Lawrence Haar is a Financial Economist with many years of experience in managing commodity risk through senior roles with Banks, Energy and Mining companies and the petroleum sector.  He has also been a Senior Commodity Specialist for the FSA – Prudential Risk Division and was a Director with Deloitte Audit Assurance covering the valuation of complex commodity related assets and liabilities. 

He has taught at MBA level for City University CASS Business School, the University of Surrey.  Dr Haar earned his PhD in 2000 from the University of Surrey and previous degrees from New York University and Brown University. 

Pre-course questionnaire:

A detailed questionnaire will be sent to all course participants to establish exactly where the group training needs lie. The completed forms will be analysed by the course leader/trainer and followed by telephone if further clarification is required. As a result we can guarantee that the course is pitched at exactly the right level and that the issues that you regard as relevant are addressed. The course material will reflect these issues and will enable you to digest the subject matter after the event in your own time.

Who should attend?

From Commodity Suppliers, Consumers, Trading Firms, Banks, Hedge Funds and other Market Participants

• Risk Managers

• Traders

• Portfolio Managers

• Model Validation

• Derivatives

• Structured Products

• Commodity Financing

• Economists

• Quantitative Research

• Product Development

Key Topics

  • The basic conditions of supply and demand, the structure, the behaviour and performance of the commodity market participants;
  • The technical aspects of commodity production as found in the energy, mining and petroleum sectors;
  • Basis risk and quality adjustments and differentials
  • Commodity Futures Exchanges
  • Contract specifications

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    marcus evans specialises in the research and development of strategic events for senior business executives. From our international network of 63 offices, marcus evans produces over 1000 event days a year on strategic issues in corporate finance, telecommunications, technology, health, transportation, capital markets, human resources and business improvement.

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    Event Contact

    For all enquiries regarding speaking, sponsoring and attending this conference contact:

    Gareth Banks

    101 Finsbury Pavement
    London EC2A 1RS

    +44 (0) 20 3002 3400
    Fax: +44 (0) 20 3002 3016
    Email: garethb@marcusevansuk.com