Options – Real Options

This course explains what real options concern. It is set out that the right to undertake a certain business initiative can be modelled in terms of financial options. In particular, this can be applied to physical assets in the portfolio of commodity or energy players, or their supply contracts. This way, the risks can be identified better, alike hedging them. Besides, the valuation of these assets also becomes easier.

This course covers the following video lessons:

1. Introduction
2. Project size – Option to expand
3. Project size – Option to contract
4. Project size – Option to expand or contract
5. Project life & timing – Growth options
6. Project life & timing – Option to initiate
7. Project life & timing – Option to abandon
8. Project life & timing – Sequencing option
9. Project operations – Output mix option
10. Project operations – Input mix option
11. Project operations – Operating scale options
12. The real option approach – DCF & NPV
13. The real option approach – Financial options versus real options


Our Labels

Entrima and Market Abuse Centre (MAC) are the two labels we operate to provide learning services for professionals in the commodity & energy markets.

Content & Context

Entrima’s mission is to transfer knowledge regarding the business, controls & operations of parties in (or relating to) the wholesale markets.


Conduct & Culture

MAC’s mission is to facilitate the prevention & detection of misconduct and to foster proper behaviour in organisations. This is achieved via training, periodic updates and increased awareness.