What You Will Learn

1. How to use futures contracts, options, swaps, trigger deals and EFPs to protect your company from natural gas, oil and electricity price risk.
    
2. How futures contracts, swaps and physical energy contracts are traded, and how the NYMEX, energy brokers and electronic exchanges operate. 
    
3. How buyers and sellers can use natural gas futures and options to create price hedges, price caps, price floors, and "no-cost" collars.
    
4. What basis risk is, and how it can destroy your hedging program.
    
5. How to structure profitable energy and electric power transactions without exposure to price risk.
    
6. The details of new industry clearing procedures and firm contract language.
    
7. The difference between brokers, traders, dealers, market-makers, marketers and wholesale energy merchants.
    
8. Why most energy and power traders prefer to execute hub-referenced transactions instead of doing point-to-point deals.
    
9. How these concepts and financial instruments will influence development of forward electric power markets.
    

You Will Also Learn

1. How basis trading, volatility trading, structured transactions and EFPs work, and how over-the-counter energy dealers make markets.
    
2. How heat-rate-linked power transactions can effectively convert natural gas futures, options, swaps and other financial instruments into electric power derivatives.
    
3. The Master Energy Trading Equation and why trading energy is different.
    
4. The basics of energy and electricity options, the implications of energy high price volatility, and why energy and electric power assets are options in disguise.
    
5. How to hedge energy price risk with NYMEX options contracts.
    
6. How to calculate annualized volatility, the fundamentals of pricing options and why the Black Scholes Model doesn't work for energy or electric power.
    
7. The put-call option parity equation, sythetic option positions, and how to delta hedge.
   

Seminar Agenda

Day One

• Overview of forward energy and electric power markets, terminology, price risk and the basics of energy trading
• Liquidity risk, funding risk, credit risk and an overview of Mark-to-Market accounting
• What futures contracts are, and why they evolved
• How futures contracts are traded, and how the NYMEX future exchange & its computer trading ACCESS system operates
• Futures-related account maintenance, margin deposits 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

Day Two

• 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 exchanges such as ICE and NYMEX's Clearport Services work
• The difference between financial and physical basis ("fin" and phys")
• Why so many industry participants use trigger deals
• What EFP's are, 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

Your Instructor

John Adamiak is President and Founder of PGS Energy Training and is 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 10 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.

Who Should Attend this Seminar?

Professionals from energy producers, utilities, industrial companies, municipals, energy marketers, banks, government regulators and electric generators; 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.

Prerequisites

This group live seminar has no prerequisites. No advance preparation is required before the seminar.

Why Choose PGS?

Since 1996, PGS seminars have been known for their clear explanations and in-depth content. Register for a PGS program today, and team up with the leader in electric power and energy education. Over 3,000 energy and financial professionals have already attended PGS's proven courses. View Past Seminar Attendees

Prices

Please call 412-494-0450 for pricing information.

CPE Credits

This group live seminar is eligible for 13.0 CPE credits. Be aware that state boards of accountancy have final authority on the acceptance of individual courses for CPE credit. As of January 1, 2002, sponsored learning activities are measured by program length, with one 50-minute period equal to one CPE credit. One-half CPE credit increments (equal to 25 minutes) are permitted after the first credit has been earned in a given learning activity. You may want to verify that the state board from which your participants will be receiving credit accept one-half credits.

PGS  Energy Training is registered with the National Association of State Boards of Accountancy (NASBA)  as a sponsor of continuing professional education  on the National Registry of CPE Sponsors. State boards of accountancy have final authority on  the acceptance of individual courses for CPE  credit. Complaints regarding registered sponsors  may be addressed to the National Registry of  CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417. Web site: www.nasba.org. CPAs interested in attending any seminars  should contact our offices for details on CPE credits granted and any prerequisite requirements.