Risk Management Training Programs
The Fundamentals of Commodity Risk and Its Derivatives
Réf: FOCORD-205
The Fundamentals of Commodity Risk and Its Derivatives
IN-PERSON OR REMOTE CLASS
Duration: 2 days
➕ Remote learning activity
2050,00 € VAT Exempt (*)
📌 Reference: FOCORD-205
(*) As a training organization, Finance Tutoring benefits from a VAT exemption under Article 261-4-4° of the French General Tax Code (CGI).
Training Description
Fundamentals of Commodity Risk and Derivatives
The training "Fundamentals of Commodity Risk and Derivatives" provides an in-depth exploration of the mechanisms and strategies used to manage risks associated with commodity price fluctuations.
Typology and Characteristics of Commodities
Participants will discover the different types of commodities, the specificities of this asset class, and an overview of recent trends in major commodities.
Risk Hedging Mechanisms
The training will also cover key risk hedging mechanisms used by commodity producers and consumers, as well as the different hedging derivatives: futures, forwards, swaps, and options.
Derivative Instruments for Hedging
A detailed analysis of commonly used derivative instruments will help participants understand how they function and how they can be integrated into a risk management strategy.
Case Studies and Practical Applications
Numerous case studies will allow participants to see how these instruments can be used for hedging, from both the producer’s and consumer’s perspectives.
Training Objectives
- Understand the different categories of commodities.
- Analyze hedging issues from the perspective of both producers and consumers.
- Learn the factors influencing the value of a commodity futures contract.
- Understand the functioning of a commodity swap.
- Utilize futures contracts, swaps, and options for commodity hedging strategies.
Target Audience
- Commodity supply chain professionals
- Commodity traders and brokers
- Financial analysts specializing in commodities
- Risk managers in commodity production and consumption companies
- Investors interested in the commodity markets
- Risk management and hedging strategy consultants
- Executives and professionals in agriculture, energy, and minerals sectors seeking to understand market dynamics and risk hedging strategies
Training Duration
- 2 days
Training Program
Fundamentals of Commodity Risk and Derivatives
I. Commodity Markets
- Market Functioning
- Typology
- Main Indices
- Difference Between Commodities and Financial Assets
Practical Case:
Review and discussion of recent price trends of various commodities
II. Principles of Commodity Risk Hedging
- Definition
- Types of Risks
- Main Indices
- Key Players: Producers and Consumers
III. Futures and Forward Contracts
- Definition, Role, and Functioning
- Difference Between Spot Price and Futures Price
- Contango and Backwardation
- Factors Influencing Futures Prices:
-
- Interest Rates
- Logistics, Storage Costs, and Convenience Yield
- The Concept of No Arbitrage Opportunity
- Forward Contracts
- Main Market Participants
Practical Case:
Analysis of the Technical Sheet of Futures Contract No.9 on Sugar
IV. Commodity Swaps
- Definition
- Role
- Functioning
Practical Case:
Example of a Hedging Strategy on Sugar (from the Producer and Consumer Perspective)
V. Commodity Options
- Definition and Functioning: Calls and Puts
- Factors Influencing Option Pricing: The Greeks
Practical Case:
Example of a Hedging Strategy on Sugar (from the Producer and Consumer Perspective)