LNG Trading & Hedging London July 2020

LNG Trading & Hedging

Description:

The course covers physical LNG, gas markets and electronic trading using an innovative programme that utilises a revolutionary trading simulator that ensures practical hands on experience of ‘real market scenarios’ in a unique three day learning experience. It is an opportunity to expand your network by learning alongside candidates from various companies and backgrounds. The course facilitators are former traders who will develop your ability to understand and trade the LNG market.

Objective:

After completion of this course you will understand:- Global LNG Market Developments; Mechanics of shipping and operations; Mechanics of trading; LNG Trading Opportunities; Risk management and forward curves; Managing LNG complexities; Advanced trading and pricing strategies.

  • LNG
  • £2,750
  • London
  • Face-to-face

Dates available:

14 – 16 July 2020

LNG Trading & Hedging London February 2020

LNG Trading & Hedging

Description:

The course covers physical LNG, gas markets and electronic trading using an innovative programme that utilises a revolutionary trading simulator that ensures practical hands on experience of ‘real market scenarios’ in a unique three day learning experience. It is an opportunity to expand your network by learning alongside candidates from various companies and backgrounds. The course facilitators are former traders who will develop your ability to understand and trade the LNG market.

Objective:

After completion of this course you will understand:- Global LNG Market Developments; Mechanics of shipping and operations; Mechanics of trading; LNG Trading Opportunities; Risk management and forward curves; Managing LNG complexities; Advanced trading and pricing strategies.

  • LNG
  • £2,750
  • London
  • Face-to-face

Dates available:

11 – 13 February 2020

Introduction to Physical LNG Trading

Introduction to Physical Arbitrage of LNG

Description:

This course will explain what is meant by the term LNG Arbitrage and some of the things traders involved in these markets need to consider.  The course contains the following chapters: what is physical arbitrage? An introduction to vessel chartering. Costs/benefits of transporting LNG. When do traders arbitrage LNG? Complexities of LNG arbitrage. Hedging an arbitrage transaction.

Objective:

After completion of this course you will understand:- what in meant by the term arbitrage; freight considerations and delivery terms; risks and opportunities of moving LNG; the difference between fixed and floating priced cargoes; what is meant by “Arbitrage Hedging”; how traders use derivatives to manage price risk on physical deals.

Duration:

Approx. 90 mins

  • LNG
  • £50
  • Anywhere
  • Online

Introduction to Physical LNG Trading

Introduction to Physical LNG Trading

Description:

This course will explain what is meant by the phrase ‘Physical LNG trading’ and some of the things traders involved in these markets need to consider.

Objective:

After completion of this course you will understand:-  what in meant by physical LNG trading;  physical delivery terms;  what the typical cargo cycle is and some of the common challenges in moving LNG;  common pricing mechanisms and benchmarks.

Duration:

Approx. 60 mins

  • LNG
  • £50
  • Anywhere
  • Online

Bubble markets trading strategy

Bubble markets trading strategy

At TwoTwoFive we always encourage our delegates to stay in touch after our courses, and we are always willing to answer questions and provide additional information. Last week a delegate who attended our 2 day Derivatives and Options course in November 2018 got in touch to ask about a strategy we discussed during the course. The strategy relates to how to use options to trade a “bubble” market. We thought we’d share the strategy here.

There are many examples of balloon or bubble markets; the Wall Street crash of 1929, the dot-com bubble of 2000 and Bitcoin in 2018 to name but three. Bubble markets are a well-recognised phenomenon that typically occur when a market rises rapidly leading to hysteria and greed; everyone wants to buy! The first thing to recognise is that without exception a market that goes up in this fashion will correct and come down at some point. The correction is usually just as violent as the original move up.  So most advice is to avoid trading these markets as the big problem is spotting when the market will turn and this is almost impossible! However buying options, instead of say futures, can minimise your trading risk. Most people make the mistake of saying “I know one day the market will come down so I will start buying Puts”. But if the market keeps going up you lose the premium you have paid out with no gain. You may be tempted to buy more Puts, but as you don’t know when the market will turn, you are effectively standing in front of a freight train; namely the rising market. Yes your loss is limited to the premium, but it is still a loss!

An alternative strategy is this; If the market is going up but at some point we are confident it will correct, we start by buying out of the money Calls, with relatively short expiry. Say 10 points above the market with one month to go, as an example. Essentially we want to spend a relatively small amount on the premium that we are comfortable to lose.  If we are really unlucky and the market turns just after we bought the Calls then we just lose the premium. (But now confident that the market will fall we can reverse the following strategy….start buying OTM Puts below the market).  More likely the market will continue to rise sharply and the OTM Calls will quickly rise in value. OTM options with short expiry rise in value (and Delta) very quickly as they come into the money. We can then sell them at a healthy profit and immediately buy new OTM Calls, again at a low price at a higher strike as the market has moved up so quickly. If the market keeps rising we keep doing this. Buy cheap OTM Calls, sell for a profit and reset by buying cheap higher strike OTM Calls again.  If the bubble continues for some time you can make a lot of money doing this for very limited risk, as you have already covered the cost of your original options purchase.

At some point the market will turn and drop rapidly, as the bubble bursts. At this point we will probably lose the premium on the last set of Calls we bought as they will be worthless but this is small compared to the profit we have already gained. However now confident that the market will correct and fall a long way we can reverse the strategy and start buying OTM Puts below the market and resetting at lower strikes as the market drops. We should add the caveat that every market and every bubble is a little different so there are no guarantees this will work every time. Your own trading objectives and attitude to risk must be considered too. But in our view this is the best way of trading bubble markets and would have worked in the examples given above. Now we just need another bubble market to trade..!

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Introduction to Pipelines and Power Interconnectors

Introduction to Pipelines and Power Interconnectors

Description:

This course will explain how the physical links between markets are valued and how traders can extract additional value through the optimisation of these assets.

Objective:

After completion of this course you will understand:- what pipelines and power interconnectors are and how they are used by different groups; interconnector economics and common associated terms; what fixed/variable costs are and how they impact traders decisions and how a trader uses derivatives to optimise pipelines and power interconnectors.

Duration:

Approx. 60 mins

  • Gas & Power
  • £50
  • Anywhere
  • Online

Introduction to Storage of Natural Gas

Introduction to Storage of Natural Gas

Description:

This course will explain how traders use storage to extract value from a forward curve along with the general economics and terminology that are involved with natural gas storage trading.

Objective:

After completion of this course you will understand:- what storage is and how it is used by different groups; storage economics and common associated terms; how market structure affects a traders decision to store natural gas and how a trader will optimise storage to extract value.

Duration:

Approx. 60 mins

  • Gas & Power
  • £50
  • Anywhere
  • Online

Introduction to Derivatives and Spreads – Gas & Power

Introduction to Derivatives and Spreads - Gas & Power

Description:

This course will go into more detail around what derivatives are and how they are used by traders. It will also introduce the concept of spread trading, forward curves and market structure.

Objective:

After completion of this course you will understand:- the differences between the four main types of derivative contract; how traders use derivatives in their day to day roles; what spread trading is and why it is becoming so popular; what is meant by the phrase forward curve; what is market structure and how do traders use it to make money.

Duration:

Approx.45 mins

  • Gas & Power
  • £50
  • Anywhere
  • Online

Trading Fundamentals – Gas & Power

Trading Fundamentals – Gas & Power

Description:

This introductory course will cover the basics of trading, what it is, who participates in it and what people actually trade from a Gas & Power perspective. It also delves into the world of risk management and trading discipline.

It is recommended that this module is the first in the series to be completed, particularly for those users new to the subject area.

Objective:

After completion of this course you will understand:- why people trade; common trading terms and phrases and what they mean; the different types of Gas & Power contracts that people trade; what is risk and how do traders manage risk; trading best practise.

Duration:

Approx.45 mins

  • Gas & Power
  • £50
  • Anywhere
  • Online

Introduction to Physical Trading of Crude Oil and Products

Introduction to Physical Trading of Crude Oil and Products

Description:

This course will introduce the world of physical oil trading. Why it is different from trading derivatives and how it creates opportunities for a trading organisation.

Objective:

After completion of this course you will understand:- common physical delivery terms; supply/demand drivers for physical Crude and Products trading; contractual considerations for Physical Crude and Products trading; how physical cargoes are priced; how traders make money from trading differentials.

Duration:

Approx. 45 mins

  • Oil – Crude & Products
  • £50
  • Anywhere
  • Online