Enerji Programları
K05.Fundamentals of Energy/Electricity Forward Markets, Futures,Options & Derivatives
You Will Also Learn
- How basis trading, volatility trading, structured transactions and EFPs work, and how over-the-counter energy dealers make markets.
- How heat-rate-linked power transactions can effectively convert natural gas futures, options, swaps and other financial instruments into electric power derivatives.
- The Master Energy Trading Equation and why trading energy is different.
- The basics of energy and electricity options, the implications of energy high price volatility, and why energy and electric power assets are options in disguise.
- How to hedge energy price risk with NYMEX options contracts.
- How to calculate annualized volatility, the fundamentals of pricing options and why the Black Scholes Model doesn't work for energy or electric power.
- The put-call option parity equation, sythetic option positions, and how to delta hedge.
Seminar Agenda
Day One
- Overview of forward energy and electric power markets, terminology, price risk and the basics of energy trading
- Liquidity risk, funding risk, credit risk and an overview of Mark-to-Market accounting
- What futures contracts are, and why they evolved
- How futures contracts are traded, and how the NYMEX future exchange & its computer trading ACCESS system operates
- Futures-related account maintenance, margin deposits and cash management issues
- How buyers and sellers hedge natural gas price risk with NYMEX futures contracts
- How to hedge electricity price risk with NYMEX natural gas futures contracts
- What basis is, and what the different types of price spreads are
- What basis risk is, and how it can destroy your futures hedge
- How traders "basis trade" and why it works
Day Two
- The fundamentals of fixed-for-floating swaps, basis swaps, exchange indexed swaps, and contracts-for-differences
- How over-the-counter dealers and institutional energy brokers operate
- How electronic exchanges such as ICE and NYMEX's Clearport Services work
- The difference between financial and physical basis ("fin" and phys")
- Why so many industry participants use trigger deals
- What EFP's are, and why this powerful tool is used by sophisticated traders
- How the wholesale energy trading equation is defined, and what its implications are
- How this equation underlies the structure of energy trading books
- Puts and calls / Basic option terminology and concepts
- The difference between exchange-traded, over-the-counter and physical energy options
- What American, European and Asian style options are
- How to create price caps and collars with exchange-traded options
- How to calculate annualized volatility and why the BSM does not accurately price energy and electricity options
- What the option Greeks are, and the basic concept of delta hedging
- How to buy and sell volatility
- Two examples of structured energy transactions
