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A Trader’s Guide to Commodity Derivatives


Objective: To provide a practical introduction to commodity derivative products, including pricing, hedging and structuring commodity derivatives. This course covers both exchange traded and over the counter commodity derivatives in addition to commodity derivative securities such as oil linked bonds. It covers structuring and hedging considerations from both buyer and seller perspectives. Commodity derivative products, including oil and metal-based derivatives. Pricing, hedging, structuring and risk management considerations.

Will learn:

·        Special features of the underlying commodity as it relates to derivatives

·        Commodity structures from both issuer and investor / hedger perspective

·        Structuring, pricing, hedging and basic management of commodity derivatives

·        Commodity derivative structures designed to optimise risk / return profiles for both issuer and purchaser

·        Structuring, pricing and hedging of OTC commodity derivatives

·        Structured securities with commodity linkage

Audience:  market professionals with at least 1-year experience (some basic understanding of markets/products helpful)

·        Traders, sales, support,

·        Internal Audit

·        Fund managers

·        Risk management

·        Sales personnel

·        Corporate hedgers

·        Producers

·        Middle office personnel

Table of Contents

1)     Special features of Commodity derivatives: Introduction to the special characteristics of commodities [particularly oil and metals] from issuer and investor perspective.

2)     Valuation of structures: Pricing and hedging considerations

3)     Workshops: Exercises using spread sheets for pricing and hedging

4)     Structures: Vanilla structures, quantos, warrants, commodity swaps, CCY protected structures, options on spreads, “cracks”

5)     Financial Engineering: Structuring considerations of commodity derivatives

6)     Risk Management: Hedging problems and techniques for commodity derivatives

7)     Securities: Structured notes, oil linked bonds

8)     Exchange traded: IPE, COMEX, LME

9)     OTC: Jet fuel swaps, gas crack options…

10) Tax and Regulatory: Structures to optimise external legal and regulatory constraints


750 Pages of comprehensive and extensively illustrated Handout Notes (see samples here)

Plus copies of relevant TG2 Books/e-Books

Note: Seminars can be tailored to your trading, risk, client, and systems needs.  Submit your needs, and/or "cut/paste" from other Seminars (see entire "standard" list HERE)

    Get a Syllabus in more detail

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Last modified: July 25, 2011