Fundamentals of Trading

Module: Liberalisation of the Energy Markets

Module: Risk – What is it?

Module: Market risk – What is it?

Module: Risk management

Module: Volatility – What is it?

Module: Counterparty risk – What is it?

Module: Credit risk management

Module: Liquidity & Liquidity risk

Module: The trading organisation - The role of trading business unit

Module: The trading organisation - Front, Middle & Back Office

Module: Trading - What is it and how is it organised?

Module: Trading - The reasons for concluding transactions

Module: Trading - The order book

Module: Trading - Order types

Module: Trading process - Clearing

Module: Trading process - Settlement

Module: Trading process - Transaction flow

Module: Trading process - ETRM system

Module: Markets & Products - Spot versus Forward

Module: Markets & Products - Derivatives

Module: Markets & Products - Forwards versus Futures

Module: Markets & Products - Contract for difference

Module: Markets & Products - Swaps

Module: Markets & Products - Options

Module: Trading platforms - OTC markets & trading

Module: Trading platforms - Brokerage services

Module: Trading platforms - Exchange trading

Module: Trading platforms - Trading screens & platforms

Module: Pricing, price drivers & indexation

Module: FX markets & trading

Module: Accounting - Mark-to-Market

Module: Accounting - Book structure & Internal transfers

Module: Terminology - Upstream, midstream & downstream

Module: Terminology - Opening & Closing, Long & Short, Bull & Bear

Reader: Fundamentals of Energy Trading & Risk Management

Exam: Fundamentals of Energy Trading & Risk Management

Register for open enrollment

Objectives

Acquiring insight and knowledge of:

  • The fundamentals of (energy) trading & risk management;
  • The role of trading (organisations) and the interaction with the in/external environment;
  • The role of risk management and its position within organisations;
  • The role of regulation and the consequences for organisations and their environment;
  • The role of accounting (rules) for trading(-related) organisations.

Course contents

  • Module: Liberalisation of the Energy Markets
    What is aim of liberalisation? What are the consequences? The EU 3rd energy package.
  • Module: Risk – What is it?
    Risk and return; risk-reward ratio; risk versus uncertainty; quantification versus qualification of risk. 
  • Module: Market risk – What is it?
    Price risk; hedging; market characteristics, such as location, delivery time/period, time to maturity.
  • Module: Risk management
    Identification of risk, measuring risk and control of risk; liquidation, insurance and hedging.
  • Module: Volatility – What is it?
    The concept volatility explained; the calculation and the interpretation of volatility figures.
  • Module: Counterparty risk – What is it?
    Credit risk and delivery risk; the consequences of hedging for market risk and counterparty risk.
  • Module: Credit risk management
    Clearing; the concept of netting; credit limits; ratings; sleeving; systemic risk and regulation.
  • Module: Liquidity & Liquidity risk
    Market liquidity versus funding liquidity; indicators for market liquidity; position limits.
  • Module: The trading organisation - The role of trading business unit
    Interaction between the sales department and trade and between generation and the trading unit.
  • Module: The trading organisation - Front, Middle & Back Office
    Departments and sub-departments within the trading business unit, and their role.
  • Module: Trading - What is it and how is it organised?
    Trading versus procurement and sales; decision making & connectivity; trading tools & data.
  • Module: Trading - The reasons for concluding transactions
    About procurement, sales, balancing, hedging, arbitrage and speculation. Why is it applied?
  • Module: Trading - The order book
    How does trading take place? How are prices set? What orders are executed? When? How?
  • Module: Trading - Order types
    What order types are applied and for what reasons? Market, limit, all-or-none, iceberg & stop-loss order.
  • Module: Trading process - Clearing
    Central counterparty; clearing house & clearing members; credit risk; margining & collateralisation.
  • Module: Trading process - Settlement
    Physical delivery versus cash settlement; settlement procedures; examples with calculations.
  • Module: Trading process - Transaction flow
    Pre-trade, trade and post-trade processes; tasks & responsibilities of front/middle & back office staff.
  • Module: Trading process - ETRM system
    The task of energy trading and risk management software; the users and purposes of the tool.
  • Module: Markets & Products - Spot versus Forward
    The difference between spot/prompt and forward/futures markets, prices and transactions.
  • Module: Markets & Products - Derivatives
    What are derivatives? What are these financial instruments used for? By whom are these tools applied?
  • Module: Markets & Products - Forwards versus Futures
    What is a forward or futures contract? What are the differential between those? Contract specs.
  • Module: Markets & Products - Contract for difference
    What is a CFD? What are CFDs used for? Where can the instruments be traded? How are these settled?
  • Module: Markets & Products - Swaps
    What is a swap? What types of swaps are available? What is their purpose? How are swaps settled?
  • Module: Markets & Products - Options
    What is a call or put option? How can these tools be applied? How does pricing of options take place?
  • Module: Trading platforms - OTC markets & trading
    How can OTC market be characterized? How is OTC trading organized? What are master agreements?
  • Module: Trading platforms - Brokerage services
    What is the role of a broker? What are the differentials between inter-dealer brokers and broker-dealers?
  • Module: Trading platforms - Exchange trading
    What features does exchange trading have? How is it organized? What fees are in place for members?
  • Module: Trading platforms - Trading screens & platforms
    What details are relevant to traders? What is Trayport, how does it work and why do traders use it?
  • Module: Pricing, price drivers & indexation
    How do prices arise in the market? What factors drive prices? What is an index? What is it used for?
  • Module: FX markets & trading
    Forex exposures of companies; the role of the treasury department; currency pairs; exchange rates.
  • Module: Accounting - Mark-to-Market
    Bookkeeping; accounting rules; the differences & consequences of M-to-M vs. historical cost accounting.
  • Module: Accounting - Book structure & Internal transfers
    How do firms organize in-house trading, between trade and other business units? Why? At what price?
  • Module: Terminology - Upstream, midstream & downstream
    Explanation of the terminology which is related to the value chain.
  • Module: Terminology - Opening & Closing, Long & Short, Bull & Bear
    What do the concepts of long or short imply? Likewise for bullish or bearish, or opening or closing.
  • Reader
  • Exam
    This is the exam for Fundamentals of Energy Trading & Risk Management. After passing the exam, you will be able to receive your certificate here as well.
Price online €299.00 excl. VAT
Price in-class €1490.00 excl. VAT
Calendar in-class Amsterdam
1 - 2 Feb 2018

Amsterdam
30 Apr - 1 May 2018

Amsterdam
25 - 26 Sep 2018

Amsterdam
30 Nov - 1 Dec 2018
Duration in-class 2 days
Level Fundamentals
Language English

Course elements

eLearning

34 video modules (a combined total of ~340 minutes of video content).

Extensive Reader

A reader providing significant background and depth.

Tests & Final Exam

Several test questions per module and a final exam covering the whole course.

Certification

When the final exam has been passed you will receive the digital certificate and can be registered with the Charter.