Exposure Assesment

Short description

Analyse your exposure. Watch the quantification of the value at risk.
This simulation mimics the fundamentals of the trading environment and market activity. Focus is only on relevant aspects so that you cannot be distracted by (currently) irrelevant aspects. The modular setup of this simulation allows therefore for gradually grasping one concept or process after another, making it very suitable for non-traders. Actually, it is suitable for all professionals with a role in (or relating to) the wholesale commodity or energy markets. It is very suitable for non-traders as terminology is covered on the go, thereby intuitively embedding concepts and processes.

Capacity

You act in the role of a market participant.
You act in the capacity of aggressor.

Task

Your task is to analyse your exposure (namely, the value at risk, or VaR).
Note: it develops opposite of your P&L; mind the inverse relationship (P&L vs. exposure).

Objective

The aim of this simulation is to:

Analyse the market (price) risk quantification of an open position.
Therefore, open a position (long or short), initially of one unit only. Then, watch the market price to develop and see what this does to your exposure (check your VaR).

Analyse the market (price) risk quantification of a closed position.
Therefore, close the position that was initially opened. Upon closing the position, your exposure (VaR) should now be zero.
Now start all over again, but this time you take a position of more than one unit (for instance five units). Again, analyse your exposure; the value at risk changes dynamically due to market price fluctuations.
At a certain point, close your position and watch your exposure; it should now be zero.

 

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.

www.entrima.org


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.

www.marketabusecentre.com