The programmes “Forwards & Futures, and Forwards & Futures Trading” (all levels) are specifically designed to expand delegates’ knowledge of, and skills with respect to, a specific type of derivatives, namely forwards and futures, their features, how to use these instruments, why and when to use them, and how they can be of help when risk exposures are to be managed. Next, during these programmes pricing of these financial instruments is incorporated, and therefore the aim will also be at (potential) price changes. Last but not least, these programmes offer insight in the opportunities and risks of these instruments and the incorporation of them in energy portfolios.
In the first level of the “Forwards & Futures, and Forwards & Futures Trading” programme focus is on the fundamentals of forward and future contracts. The focus during this programme is at what types of energy forwards and futures exist and what their features are. Contracts specifications are taken into consideration and settlement procedures are explained. This programme will also equip students with a working knowledge of how to trade forwards & futures.
In the second level of the “Forwards & Futures, and Forwards & Futures Trading” programme focus is on the pricing of forward & future contracts. The price dynamics of these instruments are brought forward in light of the energy markets. The programme therefore includes the time value of money and the cost of carry. Next, forward curves are considered and it is explained what shape they can have (at what levels) and how this may fluctuate over time. Students are explained how forwards & futures can be used as financial instruments with the purpose of hedging exposures.
In the third level of the “Forwards & Futures, and Forwards & Futures Trading” programme focus is on the application of forwards & futures in a sophisticated way. Combinations of these instruments are considered. Combinations are set up for hedging purposes, in order to profit from arbitrage opportunities, and to speculate. How does all of this work? And what are the implications of such?
Students are explained what location spreads are and why these are set up by market participants. The same is applicable for quality spreads, margin spreads, cross-commodity spreads and time spreads.
In the fourth level of the “Forwards & Futures, and Forwards & Futures Trading” programme focus is on portfolio management and risk optimisation. The programme goes beyond energy forwards and futures, and takes into account related contracts, namely weather-related forwards & futures. After all, weather has a huge impact on oil, gas, coal and power production, as well as on fossil fuel and electricity consumption. This implies a significant impact on the turnover of energy companies and their profitability.
In order to manage these risks organisations can make use of weather derivatives. This programme focuses therefore on this kind of instruments and their specific application.
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Course Guide
