This seminar is the energy & electric power industry's most comprehensive two-day training program on this topic.This proven program is for professionals who are looking for a comprehensive and clearly explained understanding of natural gas, oil and electricity financial instruments, the markets they trade in, and how these powerful tools can be used to manage risk and structure profitable transactions.
What You Will Learn
- How to use futures contracts, options, swaps, trigger deals and EFPs to protect your company from natural gas, oil and electricity price risk.
- How physical and cash settled futures contracts, over-the-counter energy swaps, and physical forward contracts are traded and the purposes served by these markets.
- How the CME-NYMEX and ICE Futures & options markets operate, and how electronic marketplaces and electronic futures exchanges such as ICE, CME Globex, and CME Clearport Services work.
- How "margining" works with the Futures Exchange, its cash management impacts, and the role of the Clearinghouse.
- What the difference is between an FCM, OTC broker, trader, market-maker and energy/power marketer.
- How buyers and sellers can use natural gas futures and options to create price hedges, price caps, price floors, and "no-cost" collars to manage natural gas, electricity, oil, and petroleum products price risk.
- What basis risk is, and how basis and delivery risk can destroy your hedging program.
- How to structure profitable energy and electric power transactions without exposure to price risk, and what "trading around assets" means.
- A summary of industry clearing procedures and transaction contract language.
- The difference between brokers, traders, dealers, market-makers, marketers, and wholesale energy merchants.
- How electricity futures and derivatives are impacting the forward electric power markets.
- How to structure profitable energy, electric power, and petroleum transactions; financially create energy assets; financially turn one commodity into another; and how to make money by buying valuable options from your customers and suppliers for low prices.
- Why "Extendible" deals are so profitable, and what "trading around assets" means.
You Will Also Learn
- The fundamentals of basis trading, spread trading, structured transactions, and EFPs.
- How heat-rate-linked power transactions can effectively convert natural gas futures, options, swaps and other financial instruments into powerful electric power hedging instruments and financial derivatives.
- The Master Energy Trading/Hedging Equation, and why trading energy is different from trading financial products and other commodities.
- The fundamentals of energy and electricity options, the implications of high energy price volatility, and why energy and electric power assets are really valuable Call options in disguise.
- How to hedge energy price risk with CME-NYMEX options contracts.
- How to calculate annualized volatility, the fundamentals of pricing options and why the Black Scholes model doesn't work for pricing energy and electricity options.
- The put-call option parity equation, synthetic option positions, and how to delta hedge.
- What Tolling Deals, Asset Optionality, and the petroleum industry "Carry Trades" are, and how they work.
- How the electricity financial markets interact the ISO Day-Ahead Energy Auction markets, and how these two separate worlds support each other.
- What the terms "Contango" and "Backwardation" mean.
Who Should Attend this SeminarAmong those who will benefit from this seminar include energy and electric power executives; attorneys; government regulators; traders & trading support staff; marketing, sales, purchasing & risk management personnel; accountants & auditors; plant operators; engineers; and corporate planners. Types of companies that typically attend this program include energy producers and marketers; utilities; banks & financial houses; industrial companies; accounting, consulting & law firms; municipal utilities; government regulators and electric generators.
Prerequisites and Advance Preparation
This fundamental level group live seminar has no prerequisites. No advance preparation is required before the seminar.
Basic level. This fundamental course begins with basic material and then proceeds to the intermediate level.
Hotel and Seminar InformationThis two-day seminar will be held at the hotel listed below. The seminar will start promptly at 8:00 AM and will finish at 5:00 PM on the first day. On the second day, the seminar will resume at 8:00 AM and will finish at 1:00 PM. The program includes continental breakfast, lunch and coffee breaks on the first day and a continental breakfast and coffee breaks on the second day. Attendees also receive a professionally produced seminar manual that can serve as a valuable office reference. Dress is casual for all seminars
Holiday Inn-Fisherman's Wharf
1300 Columbus Avenue
San Francisco, CA 94133
View Seminar Location Website
Discounted rooms for $249 per night plus tax. Please call 1-800-942-7348 and ask for the "PGS Energy Training" block. Special rate ends July 8, 2017. Book early, rooms go quickly.
- Overview of energy & electric power forward markets, terminology, price risk and the basics of energy and electricity trading.
- Liquidity risk, funding risk, credit risk and a brief discussion of Mark-to-Market accounting.
- What futures contracts are, and why and how they evolved.
- How physically-settled energy futures contracts are traded on both the NYMEX trading floor and electronically through the new NYMEX CME Globex platform.
- How cash-settled energy futures contracts are electronically traded on the ICE Futures Exchange and why the crude oil futures contract has been wildly successful.
- How the NYMEX futures exchange & its new computer trading system operates.
- Futures-related account maintenance, margin deposits, clearing and cash management issues.
- How buyers and sellers hedge natural gas price risk with NYMEX futures contracts.
- How to hedge electricity price risk with NYMEX natural gas futures contracts.
- What basis is, and what the different types of price spreads are.
- What basis risk is, and how it can destroy your futures hedge.
- How traders "basis trade" and why it works.
- The fundamentals of fixed-for-floating swaps, basis swaps, exchange indexed swaps, and contracts-for-differences.
- How over-the-counter dealers and institutional energy brokers operate.
- How electronic marketplaces such as ICE and NYMEX's Clearport Services work, how an Internet marketplace differs from an Internet futures exchange, who the CFTC and the United Kingdom's FSA regulates, and why these issues are important.
- The difference between financial and physical basis ("fin" and phys").
- Why so many industry participants use trigger deals.
- What EFP's are, and how and why this powerful tool is used by sophisticated traders.
- How the wholesale energy trading equation is defined, and what its implications are.
- How this equation underlies the structure of energy trading books.
- Puts and calls / Basic option terminology and concepts.
- The difference between exchange-traded, over-the-counter and physical energy options.
- What American, European and Asian style options are.How to create price caps and collars with exchange-traded options.
- How to calculate annualized volatility and why the BSM does not accurately price energy and electricity options.
- What the option Greeks are, and the basic concept of delta hedging.
- How to buy and sell volatility.
- Two examples of structured energy transactions.
John Adamiak is President and Founder of PGS Energy Training and an expert in energy derivatives and electric power markets. Mr. Adamiak is a well-known and highly effective seminar presenter who has over 20 years experience in the natural gas and electric power industries. His background includes 15 years as a seminar instructor, 9 years of energy transaction experience, and 6 years of strategic planning and venture capital activities. John's academic background includes an M.B.A. degree from Carnegie Mellon University.
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