Energy producers, utilities, industrials, energy marketers, generators and other companies continue to be exposed to significant natural gas and electricity related price risk, and this risk needs to be managed. Don't let an uninformed decision lead to a major earnings surprise for your organization. Learn these 5 keys to success: - How to use futures contracts, options, swaps and other derivatives to protect your company from natural gas and electricity price risk.
- How these concepts and financial instruments will influence the development of forward electric power markets.
- What basis risk is, and how it can destroy your hedging program.
- How to structure profitable transactions without exposure to energy price risk.
- How new industry clearing mechanisms and well-written contracts can help ensure the performance of your counterparties.
You will also learn: - How futures contracts, swaps and physical energy contracts are traded, and how the NYMEX, energy brokers and electronic exchanges operate.
- How to use natural gas and heat rate linked electricity options to create price caps, price floors, and "no-cost" collars.
- How basis trading, volatility trading, structured transactions and EFPs work, and how over-the-counter energy dealers make markets.
- How to calculate annualized volatility, the fundamentals of pricing options, and how to delta hedge.
Seminar Outline: Day One - Overview of commodity 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 "trade the basis" 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 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
Who should attend this seminar?
Energy producers, utilities, electric generators, liquids processors, marketers and industrial companies; energy and electric power executives; traders; marketing, sales, purchasing & risk management personnel; accountants; trading support staff; auditors; attorneys; government regulators; plant operators; engineers and corporate planners. Prerequisites: This fundamental level group live seminar has no prerequisites. No advance preparation is required before the seminar. Why choose PGS?
Over 2,500 energy and electricity professionals have attended PGS Energy Training's proven and timely seminar programs. PGS' CPE approved live group seminars are known for their in-depth coverage and easy-to-understand presentation style.
Hotel & Other Seminar Information:
Seminars are held at the hotels listed below or can be conducted on-site at your facilities. Most one-day seminars start promptly at 8:00 AM and finish at 4:00 PM, with continental breakfast available at 7:45 AM. Two-day seminars run from 8:00 AM to 4:30 PM on the first day and from 8:00 AM to 3:30 PM on Day 2. All programs include breakfast, lunch, and coffee/cookie breaks for each day. Attendees will also receive a professionally produced seminar manual that serves as a valuable office reference. Dress is casual for all seminars. Sign up early to receive your special room rate.
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Your Instructor:
John Adamiak is President of PGS Energy Training and has over 20 years experience in the energy and electric power industries, including 9 years of trading and 6 years of teaching experience. He has structured numerous energy transactions and will use this knowledge to provide you with many real-world insights and perspectives. Before founding PGS in 1990, John spent 9 years at The Consolidated Natural Gas Company (CNG) where he traded natural gas and conducted strategic studies for the executive office.
Seminar Price & Discounts:
Register now to change your career for the better. The price for this two-day seminar is $1,295 (USD). - Additional seminar registrations or attendees receive a 10% discount. Government employees receive a 10% discount on their total order.
- Bring a group of 4 or more and all attendees will receive a total 20% discount on all seminars attended. ( If you are planning to assemble a group of 4 or more, subtract the 20% discount from your seminar fee and send in your registration now. Tell other members of your group to mention your name when they register, and we will give them 20% off as well! ) All prices are in U.S. dollars.
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Payment & Cancellations:
Payment is due prior to the start of the seminar by Visa, Master Card, American Express, Diners Club, or corporate check. Seminar fees to be paid by credit card will be charged to the card at the time of registration unless other arrangements have been made. Cancellations can be made up to three (3) business days prior to the seminar for a full refund. No refunds will be made thereafter, but credit will be given toward future workshops. Substitutions may be made at any time. For more information regarding administrative policies such as complaints, please contact our offices at 412-279-9298.
CPE Credits:
This group live seminar is eligible for 13 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.
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