Managing Commodity Price Risk using Derivatives
- Finance & Investment
2 days
9am - 5pm
Singapore Management University
Who Should Attend
- Senior management, bankers, traders, finance and marketing professionals engaged in trading and financing of commodity
- Professionals in middle functions such as credit, risk, audit and operations responsible for risk management
Overview
We are living in unprecedented times. Most, if not all markets, are struggling to come to terms with the economic upheaval and onslaught of COVID-19. In addition to demand destruction, geopolitical turmoil between Russia, Middle East, Mexico and the wider OPEC+ community has resulted in flooding of crude oil markets. This has resulted in massive supply shock in energy markets sending ripples of economic turbulence across a range of related markets.
When markets recover, would prices bounce back bullishly fuelled in part by monetary & fiscal stimulus and pent-up demand, or, do we risk the onset of economic recession and worse still even a period of economic depression.
Markets will witness periods of volatility which will require shrewd strategic acumen, sound business processes and a solid risk management framework to tide through this challenging phase.
To help better manage commodity business during periods of such elevated stress and volatility levels, this detailed and hands-on, two-day workshop aims to provide the necessary tools and frameworks to assess risk and better manage them. Participants will gain practical knowledge through case application on how to risk manage using futures and options and maximise value based on market conditions.
Dates: [To be determined]
This module is available on a standalone basis.
Learning Objectives
- Understand commodity market structures and correlation with financial markets
- Learn the building blocks of hedging using derivatives
- Comprehend the mechanics and trading strategies using futures and options
- Implement strategies to protect or maximise value based on market conditions
- Simulate hedging strategies using options and physical commodity portfolio
- Gain practical knowledge through case applications
Topic/Structure
Introduction to Risk & Risk Management
- Identify different types of risks
- Describe hedgeable and unhedgeable risks
- Understand methods for managing hedgeable risks
Commodity Markets and Derivatives Overview
- Overview of Market structures
- Contrast Listed vs OTC markets
- Introduction to risk management products
Risk Management in Commodity Trading
- Understand drivers of volatility
- Learn key lessons from commodity trading firms
- Identify risk management best practices
Comprehending of Futures & Options
- Develop deep insight into Futures & Options
- Understand Options fundamentals
- Introduction to Option Greeks
Risk Management Using Futures
- Learn hedging consumer and producer risks
- Understand costs of hedging using futures
- Case study: commodity hedging using futures
Understanding Options, Pricing & Greeks
- Understand Options payoff matrix
- Learn pricing of commodity options
- Develop deeper understanding of options Greeks and its implications
Options Risk Management and Trading Strategies
- Protect commodity values in bearish markets
- Capture greater values in bullish markets
- Manage portfolios in a neutral market environment
Risk Management Using Options
- Compute the cost of hedging using options
- Case study: Commodity hedging using options
- Simulate delta hedging strategy using options and physical commodity portfolio
Getting Started in Hedging
- Articulate key considerations in hedging
- Introduction to clearing members and brokers
- Steps involved in getting started
Assessment
As part of the requirement for SkillsFuture Singapore, there will be an assessment conducted at the end of the course. The mode of assessment, which is up to the trainer’s discretion, may be an online quiz, a presentation or based on classroom exercises.
Participants are required to attain a minimum of 75% attendance and pass the associated assessment in order to receive a digital Certificate of Completion issued by Singapore Management University.
Calculate Programme Fee
Fee Table
| COMPANY-SPONSORED | |||
|
PARTICIPANT PROFILE |
SELF-SPONSORED |
SME |
NON-SME |
|
Singapore Citizen < 40 years old Permanent Resident LTVP+
|
$654 (After SSG Funding 70%) |
$254 (After SSG Funding 70% |
$654 (After SSG Funding 70%) |
|
Singapore Citizen ≥ 40 years old |
$254 (After SSG Funding 70% |
$254 (After SSG Funding 70% |
$254 (After SSG Funding 70% |
|
International Participant |
$2,180 (No Funding) |
$2,180 (No Funding) |
$2,180 (No Funding) |
All prices include 9% GST
Please note that the programme fees are subject to change without prior notice.
Post Secondary Education Account (PSEA)
PSEA can be utilised for subsidised programmes eligible for SkillsFuture Credit support. Click here to find out more.
Self Sponsored
SkillsFuture Credit
Singapore Citizens aged 25 and above may use their SkillsFuture Credits to pay for the course fees. The credits may be used on top of existing course fee funding.
This is only applicable to self-sponsored participants. Application to utilise SkillsFuture Credits can be submitted when making payment for the course via the SMU Academy TMS Portal, and can only be made within 60 days of course start date.
Please click here for more information on the SkillsFuture Credit. For help in submitting an SFC claim, you may wish to refer to our step-by-step guide on claiming SkillsFuture Credits (Individual).Workfare Skills Support Scheme
From 1 July 2023, the Workfare Skills Support (WSS) scheme has been enhanced. Please click here for more details.
Company Sponsored
Enhanced Training Support for SMEs (ETSS)
- Organisation must be registered or incorporated in Singapore
- Employment size of not more than 200 or with annual sales turnover of not more than $100 million
- Trainees must be hired in accordance with the Employment Act and fully sponsored by their employers for the course
- Trainees must be Singapore Citizens or Singapore Permanent Residents
- Trainees must not be a full-time national serviceman
- Trainees are eligible for ETSS funding only if their company's SME status is approved prior to the course commencement date. To verify your SME's status, please click here.
Please click here for more information on ETSS.
Absentee Payroll
Companies who sponsor their employees for the course may apply for Absentee Payroll here. For more information, please refer to:
AP Guide (Non-SME Companies)
Declaration Guide (SME Companies)
Intake Information
Dates: [To be determined]
